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Leading Practices to Measure and Monitor Supply Chain Operations Using SAP Supply Chain Performance Management

Todd R. Smith PwC

1

In This Session

• Understand the key constraints to “good” reporting

• Hear about big data trends and the future of reporting

• See how a supply chain interruption can be identified, isolated,

assigned, and addressed

• Learn about the functional capabilities of the SAP SCPM 2.0

solution

• Get an overview of the 7 supply chain performance scenarios,

including perfect order fulfillment, cash-to-cash cycle time, return

on working capital, and more

2

What We’ll Cover

• Reporting capabilities and “big data”

• Supply chain management – can you measure performance

today?

• Understanding the SCOR model (scenario-based)

• Solution overview – more than just KPIs

• SCPM demo

• Wrap-up

3

Poll: How Many People Are Satisfied with Their Enterprise Reporting Capability Today?

Yes – we get all that we need

Teach ‘em to fish!

Users just don’t understand

what they need!

Not really …

Why hasn’t reporting matured in 20+ years?

http://imgite.com/

4

Reporting Maturity — What’s Stopping You?

Level 1 Level 2 Level 3 Level 4

Reporting Maturity

Governance

Data

Technology

Process

People

Maturity Level 1

• Usually a single system

• Mostly transactional reporting

Maturity Level 2

• Single System

• “Some” BI Reporting

• “Defined” Reports

Maturity Level 3

• Multiple internal systems

• Limited external data

• Some flexibility to “slice and dice”

• Data Governance

Maturity Level 4

• Multiple internal systems

• External systems

• “Big Data”

• Most Flexibility

5

Reporting Challenges and Impacts

Reporting Challenges

• Business complexity is

increasing

• Disruptions in business are

beyond “your 4 walls”

• Business priorities/needs

shift

• Reporting needs change

frequently

Impacts

• Clear strategy, data model, &

data governance is required

• Data feeds, inputs, and

trends from external sources

• Report development cycle

time must be short

• Flexible and fast reporting

strategy

6

Big Data and Analytics The Next Wave of Investment

• IDC’s recent Worldwide Big Data and Analytics Predictions for

2015

“Visual data discovery tools will be growing 2.5x faster than rest of

the BI market; investing in this enabler of end-user self-service will

become a requirement for all enterprises by 2018.”

“Faster access to more relevant data and constant experimentation

is creating a further gap between leaders and the rest of the

organizations. It is also creating new challenges for IT and business

leaders tasked with their organization’s big data and analytics

strategy and execution.” (Dan Vesset, Program Vice President for

Business Analytics and Big Data Research)

7

What We’ll Cover



today?



• SCPM demo

• Wrap-up

8

Reporting Strategy Summarized

Business is “hungry” for information and insights

Provide standard and consistent reports that are

relevant to the business user

Types of data and reports vary by user (e.g.,

Executive, Business Unit, Manager, Supervisor, etc.)

Accurate and standard reports drive timely business

decisions

Reporting Business Drivers

Timely and relevant data presented to the user in a

manner that is easy to use and analyze

Standardize the method(s) used for information

delivery and the underlying technology

Provide short-term solutions and capabilities

Ensure that, as data volume and reporting complexity

increase, the solution scales

Reporting Objectives

Data Quality & Governance

Operational/Source systems environment

Performance/speed

Complexity

Resources and Skill Sets

Reporting Solution Strategy

Security

Maintainability, Scalability, and Flexibility

Development Time

Future Roadmaps

9

Reporting Strategy Summarized (cont.)

User needs

• User interface, business terms, flexibility, trending, predictive

Strategy and tools

• Cross-organization, BU, geo, role

• External

Data and governance

• Single-source of the truth, common usage

• External data sources

Data Governance & Definitions

Reporting Strategy & Tools

A reporting strategy must be flexible and address multiple aspects

and users to be effective

10

Reporting Strategy: Data and Governance

Master Data

Conditional Master Data

Transactional Data

Repo-rting

Key Reference Data or Configuration data

P&L, Sales reports, inventory

Purchase orders, sales orders

Pricing, document routing

Material, customer, vendor

Organization structure, basic settings

Examples

Enterprise reporting lucidity depends on transactional activity

Transactional data depends on conditional data and master data

Conditional data applies only in specific situations (if this customer and material, then this price)

Master data defines the material, vendor, and customer and how they will behave in the system

Configuration data defines your system and the limits of all elements

Provisional

Stable

Static

11

Reporting Strategy: Data and Governance (cont.)

Vision and Strategy

Governance

Organization/

People

Process, Procedures, and

Standards

Metrics

Enabling technology

• Establish a clear vision for achieving data excellence

• Vision embraced and supported by Executive Leadership team

• Focus on keeping the data clean is deemed integral to information

visibility

• Business owns the data, IS/IT an enabler

• Finalize approach to data governance. Understand and choose models that

will work for your company/environment/culture.

• Identify and establish data owners/stewards

• Determine need for full-time resources to focus on master data

• Establish processes, policies, and procedures to manage data across its

entire lifecycle

• Develop a comprehensive data profiling/cleansing/monitoring process

• Establish clear standards by object

• Determine need for enabling technology (workflow, notifications, auditing)

• Recognize data cannot be sustained across its lifecycle via emails and

spreadsheets alone

• Establish easy to understand and simple metrics to monitor data quality

(Completeness of record, # of changes to an object)

12

Reporting Strategy: Process

• Reporting Process

Establishing an integrated reporting model

Integrated performance management requires top-to-bottom alignment of reports

Must align with the process flows

Alignment of processes, data, and reports provides context to aid indecision making

Data should be captured at the right time and at the right level

Strategic

Directional

Operational

Transactional

Executive

Scorecards

Dashboards

Multi-dimensional

KPIs

Details

The growth from providing information (details and KPIs) to

Dashboards and Scorecards requires context to provide insights

13

Reporting Strategy: Process (cont.)

• Highly aggregated data

• Highly cross-functional

• External data integration

• Longer time horizon (multi-year)

• Aggregated data

• Cross-functional

• Analytical capabilities – targets/trending

• Medium time horizon

• Detailed Reports/Canned Reports

• Near real-time

• Process-specific

• Short time horizon

Strategic

Directional

Operational

Transactional

Executive

Scorecards

Dashboards

Multi-dimensional

KPIs

Details

The various levels align to different User groups and drive different

reporting needs with respect to timing and content

14

Reporting Strategy: Process (cont.)

• Reporting Strategy

• Approach:

Don’t focus on the reports,

focus on the scenario

Strategic

Directional

Operational

Transactional

Executive

Scorecards

Dashboards

Multi-dimensional

KPIs

Details

The growth from providing information (details and KPIs) to

Dashboards and Scorecards requires context to provide insights

15

Data

So

urc

e

Reporting Strategy: Technology

Rep

ort

ing

Pla

tfo

rm

Platform

Management Engines

Search &

Discovery

Data

Management

Platform

Services

Crystal

Web

Admin

Security

Systems

Storage

Schedule

Metadata

Management

Data

Quality

Master Data

Management

Data

Integration

Search & Discovery

Ad hoc

Reporting

Report

Production Report

Develop

Dashboard Advanced

Analytics

ERPs Data Marts External Partners

16

What We’ll Cover



today?



• SCPM demo

• Wrap-up

17

Supply Chain Council and the SCOR Model

• The Supply Chain Council (SCC)

An independent, non-profit, global organization organized in 1996 by legacy PRTM and AMR

The Supply Chain Operations Reference (SCOR) model helps manage a common set of business problems through a standardized language, standardized metrics, and common business practices which accelerate business change and improve performance

Business Management Challenges:

Strategy Development

Merger, Acquisition, or Divestiture (companies or

supply chains)

Supply optimization and re-engineering

Management alignment

New business startup (company or supply chain

startups)

Benchmarking

Process Outsourcing

SCOR helps solve the top 5 Supply Chain

Challenges:

Superior Customer Service

Cost Control

Planning and Risk Management

Supplier/Partner Relationship management

Talent

Source: www.apics.org/

18

SCOR Model Metric Taxonomy and Scenarios

• Business scenarios supported:

Perfect Order Fulfillment

Order Fulfillment Cycle Time

Supply Chain Management

Costs

Cost-of-Goods Sold

Cash-to-Cash

Supply Chain Fixed Assets

Working Capital

Perfect orderfulfillment

Order fulfillment cycle time

Supply chain management costs

Cost-of-goods sold

Cash-to-cash

Working capital

Supply Chain Performance Management

Supply chainfixed assets

The SCOR model supports end-to-end business needs and

provides a common definition for nearly 400 KPIs

19

SCOR Taxonomy

• The boundaries of any model must be well defined

Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source

Plan Plan Plan

Return Return Return Return Return Return Return Return

Supplier’s

Supplier Supplier

Internal or External Your Organization Customer

Internal or External

Customer’s

Customer

Source: www.apics.org/

20

What We’ll Cover



today?



• SCPM demo

• Wrap-up

21

Definition and Alignment

• Performance Analytics defined:

Scorecard – measurement of “top level” performance which aligns with a business perspective and objective. Scorecards are generally comprised of multiple dashboards.

SCOR model Level 1

Dashboard – measurements of “mid-level” performance. Dashboards generally are linked together to create a scorecard. Dashboards are generally comprised of multiple KPIs.

SCOR model Level 2

KPIs – measurements of execution performance. KPIs are the “lowest level” of performance measurement.

SCOR model Level 3

22

SCOR Hierarchy Example

Order

Management

Cost

Material

Acquisition

Cost

Planning and

Finance Cost Level 2 Metrics

Finished Good

Warehouse

Cost

Customer

Service Cost

Outbound

Transportation

Cost Level 3 Metrics

Express

Freight Fuel Cost Returns

Invoices

Outstanding Diagnostic Metrics

-

Strategic Goals

Perfect Order

Fulfillment Level 1 Metrics

+

Supply Chain

Management

Cost

+

Supply Chain

Effectiveness

-

23

What We’ll Cover



today?



• SCPM demo

• Wrap-up

24

Supply Chain Performance Management (SCPM)

SAP Supply Chain Performance Management analytic application helps you track performance, diagnose

bottlenecks, assess risks, and uncover new opportunities. While gaining visibility into supply chain

performance and operational dependencies, you’ll benefit from reduced costs, increased working capital,

and greater customer loyalty.

• “One source of the truth”

• Gain insight based on data in one repository

Single data repository

• Understand the disruptions and make corrections based on impact analysis

• Share & assign analysis

• Closed loop communications

Root-Cause Analysis

• Identify deviations based on trends, plan versus actual, benchmarks

• Assign owners for actions Alerts

• Structure

• Expandable

Reporting Strategy

• Nearly 20 years of Industry content

• Nearly 400 KPs predefined

Leading Practice

25

SCPM Overview

• Structured reporting strategy out of the box

Standardized User Interface

Seamless integration from Executive Scorecard to

Transactional data

Users can quickly “slice and dice” their data

• Data definitions are defined

Provides nearly 400 KPIs – predefined data definitions

Expandable and adaptable

SCPM provides a robust reporting solution that addresses multiple

reporting issues and constraints the clients face today

26

SCPM Technical Landscape

• SAP SCPM v2.0 is one of SAP’s solutions for overall supply chain

analytics that is based on the SCOR model

SAP ECC SAP ECC Non-SAP Benchmark

Data

SCPM

Portal

Planning

Books

SCPM

Portal

SAP BW

Back End

Reporting

Area

Staging

Area

Multi-Cube

Actuals Cube Planning Cube Benchmark Cube

Data Stage Data Stage Data Stage

Data Stage Data Stage Data Stage

27

SCPM Demo

28

SCPM Solution Summary

SAP’s SCPM provides:

Data governance (if you have not customized SAP)

Multiple end-to-end scenarios; top-to-bottom reporting strategy

Considers the user and the presentation

Leverages standard SAP BW/BusinessObjects technology

Leverages standard SAP Security

Level 1 Level 2 Level 3 Level 4

Reporting Maturity

Governance

Data

Technology

Process

People

SCPM Fits

“best” here

If you have licenses for SAP BW and SAP BusinessObjects, you

probably have SCPM!

29

What We’ll Cover



today?



• SCPM demo

• Wrap-up

30

Where to Find More Information

• PwC, “Reshaping the Workforce with New Analytics” (Technology

Forecast, 2012).

www.pwc.com/us/en/technology-

forecast/2012/issue1/index.jhtml

• IDC’s December 2014 webcast on Big Data and Analytics

Predictions for 2015

www.idc.com/getdoc.jsp?containerId=prUS25329114

• The Supply Chain Council/APICS (and the SCOR Model)

www.apics.org/sites/apics-supply-chain-

council/frameworks/scor

• SAP Supply Chain Performance Management (SCPM)

www54.sap.com/lob/scm.html

31

7 Key Points to Take Home

• Invest time and effort to develop a well thought out reporting

strategy; focus on scenarios

• Understand the breadth and complexity of the underlying source

data and corresponding systems

• Recognize and account for the needs of different types of users –

may require a different UI, mobile, etc.

• “Don’t give users fish,” but rather, “teach users to fish for

themselves”

• Test your reporting strategy before a full deployment – crawl,

walk, run. Look at specific scenarios, BUs, Geos, etc.

• Invest in your differentiators; leverage what you can

• If your reporting strategy takes longer than 3 months to deploy,

re-examine it

32

Your Turn!

How to contact me:

Todd R Smith

[email protected]

Please remember to complete your session evaluation

33

Disclaimer

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or

an SAP affiliate company) in Germany and other countries. All other product and service names mentioned are the trademarks of their respective

companies. Wellesley Information Services is neither owned nor controlled by SAP SE.

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