Supply chain management is the order of the day as it is a key factor for business success in any end-to-end process. E2E business processes are crucial in the new global, 24/7 economy. Supply chains are also the core competence of mid-sized as well as large industry and trading companies. Research and advisory company Gartner identified the top 15 European supply chain companies in 2019. The top five are: Inditex, Nestlé, Schneider Electric, Diageo and L’Oréal.
Analysts announced the results at the Gartner Supply Chain Executive Conference 2019 in Barcelona. “Europe-based supply chain organizations continue to build on their strong performance in 2019, demonstrating exemplary demand-driven leadership and corporate social responsibility (CSR),” said Micheal Youssef, senior research director at Gartner. “Beyond profit, leading companies focused on people and protecting the planet, with nine out of the 15 companies achieving a perfect 10 in the CSR category.” (Inditex, Nestlé, Schneider Electric, Diageo, H&M, Novo Nordisk, BMW, Nokia and Danone)
SCM is essential, not only in an organizational, technical and economic context, but also for corporate social responsibility. GIB therefore aims not only for supply chain management, but Supply Chain Excellence; hence the name of its new product SCX – Supply Chain Excellence. During SAP’s Q2 and half-year 2019 financial results press conference, CEO Bill McDermott himself highlighted the importance of SAP’s supply chain. “We are SAP partner through and through,” says Bjoern Dunkel, Managing Director GIB.
“With our core product, the GIB suite, we have always been able to perfectly complement SAP’s own logistics offering both organizationally and concerning our target group,” explains Dunkel in conversations with E-3. “We first and foremost focus on mid-sized companies and offer additions to SAP systems that add financial and personnel value. With our new suite SCX (Supply Chain Excellence), we count on SAP S/4 Hana’s digital core and provide a new, comprehensive operational planning approach for on-premises systems. Furthermore, we simplify architecture and application. We would even go as far as to say that we act as enabler for S/4 and Hana!”
SAP has been reminding top management and executives with increasing urgency about finally focusing on supply chain optimization to ensure and strengthen long-term competitive advantages. Important challenges to tackle include cost leadership, world-class manufacturing and lean management. “Sad but true: many companies have long overlooked the potential of supply chain optimization and its role as key factor for business success,” explains Bjoern Dunkel the current situation of many SAP user companies.
“However, we’re also seeing signs of increasing awareness in the mid-sized sector,” adds Dunkel optimistically. “Still, there is prevailing confusion due to the complexity of the topic. Where should companies start? Which challenge should they tackle first? Our mission is to split up the massive, daunting task and simplify it. With our GIB SCX indicator, we can show customers the maturity of their supply chains thanks to a specifically developed KPI. Consequently, customers are able to pinpoint the exact process that should be optimized first.”
Optimizing supply chains and production is even more important considering the new buzz around Industry 4.0. Is Industry 4.0 really the sustainable way forward and if so, why? “The term Industry 4.0 can mean anything nowadays,” says Bjoern Dunkel. “In our line of business, the core of Industry 4.0 is the digitalization of the horizontal supply chain and the vertical connection of production.”
GIB for horizontal and vertical processes
Where is it that Supply Chain Excellence can truly shine: in adding value horizontally or vertically? “We focus on horizontal supply chain processes. Over 25 years, we have amassed so much expertise and gained so much practical experience in close collaboration with our customers in horizontal operations that it would be overconfident to claim that we have the same know-how in vertical business processes,” says Managing Director Dunkel. “However, with the help of our parent company ifm, we were able to create a unique connection between the two worlds, perfectly integrated in SAP. Connecting vertical and horizontal processes will therefore be a significant USP of GIB SCX in the future. We are currently intensively working towards that goal.”
In general, the digitalization and the connection of things, people and machines has great potential to increase effectivity in industrial collaborations. At the same time, mid-sized companies are struggling to manage an explosive flood of data and information. “Our goal is to transform big data into smart data. We want to be able to provide the right person with the right information at the right time at the right location. Consequently, customers are not only able to react faster, but are also effectively working on optimizing their supply chain processes,” explains Dunkel.
“Real-Time” and Hana
SAP praises Hana for its real-time capabilities. Of course, this begs the question: can real-time also add value to SCM? And thinking further, is GIB planning a real-time supply chain based on Hana?
“If we are talking about a vertical connection of the supply chain, meaning the connection of production data, then we have to tread carefully when talking about real-time capabilities,” warns Bjoern Dunkel in conversations with E-3. “In the ERP world, the term real-time is used for a lot of things. As soon as data doesn’t have to be cached in RAM before they can be analyzed, meaning that the transaction accesses data directly in Hana and operates with recent data sets, the term real-time comes into play. However, in production, real-time means that information and sometimes reaction are available at the exact moment any given incident occurs.”
Data volume and speed are often not compatible. Dunkel adds, “We aim to bridge the gap between necessary speed in production and required data volume in controlling.”
From R/3 to S/4
The market has been hesitant to switch from R/3 to S/4 and Hana. Wouldn’t it therefore be better for GIB to focus its development and potential on the tried-and-tested technology instead of wasting scarce resources on a technology that only offers uncertainty regarding return on investment? According to a press release by German-speaking SAP user group DSAG, it will still take a while for the majority of SAP customers to switch to S/4 and Hana.
“GIB has a long and successful history of software development regarding R/3. I would even venture to say that our tried-and-tested GIB suite has almost reached its peak. We have reached a level of maturity that we could have only dreamed of before,” explains Bjoern Dunkel. “However, we are not lacking in ideas for how to support our customers even better still. As mentioned before, we added a new KPI for the maturity of supply chains, the SCX Indicator. Furthermore, we offer customers world-class innovations like the KPI Tower and a WCM tool.”
These new solutions are not very useful for R/3 systems, however. GIB knows that for customers to truly gain competitive advantages, they need SAP’s new technology.
“We are convinced that S/4 Hana is the future,” affirms Dunkel. “From 2020 onward, we will only develop our solutions for this system. Downgrades will only be possible after extensive cost/benefit evaluations and, of course, feasibility considerations. For GIB, the S/4 core plays a significant role in our product portfolio.”
How does Supply Chain Excellence incorporate Hana? Bjoern Dunkel says, “The digital core S/4 was created independently of database technologies which sanction and limit the existing R/3 system. Business requirements of a modern and powerful ERP system were the focus. Therefore, logic came before technology, meaning that software requirements came before database architecture. Regarding supply chains, the Hana technology grants us the possibility of analyzing and monitoring data and information in real time. This allows us to quickly and reliably simulate cause-and-effect interdependencies and make sustainable economic decisions.”
Supply Chain Excellence is necessary
GIB thinks that a new supply chain is especially necessary considering future requirements like agility, transparency and process maturity. Did we really make this many mistakes in the past that we have to start from scratch? Does SCM have to be completely renewed?
“The supply chain is not new, but the possibility to connect the individual parts of the supply chain with each other is,” explains Bjoern Dunkel. This connection only becomes possible through digitalization, modern communication and new technology. Industry 4.0 is based on new data and communication channels which connect factory sensors with the corporate back office.
“We want to leverage existing experiences and know-how in the new world, make them better and more sustainable,” says Dunkel about the new SCM era. “At the same time, we have to react faster to external factors.”
People generally agree with Dunkel here – this is the new standard, molded and shaped by the new possibilities that digitalization and connectivity grant. Companies are only able to tackle these challenges head-on if their processes are transparent, and if agility is their guiding principle – in brief, if they are willing and ready to accept digital transformation.
From Dispo Cockpit to Supply Chain Excellence
Like most SAP customers, GIB has a very successful past. The most successful product to date has been the GIB Dispo Cockpit with various features such as forecasting, controlling, operations, buying, planning and inventory management as well as replenishment planning. The current GIB roadmap shows that the company’s focus hasn’t shifted from these core topics, but the Dispo Cockpit as such is nowhere to be seen. Is this a result of GIB’s own transformation process?
“The globalization of the GIB brand showed very clearly that the name of our product Dispo Cockpit no longer does the company’s global approach justice,” explains Bjoern Dunkel. “Our new colleagues working in our branches in the U.S., the Netherlands, France, Switzerland, Italy and Brazil also agreed with us. In German, the name sums the core functionalities up very well and indicates what our software solution is capable of. All important displays and controls are available at a glance and also tailored precisely to the needs of the respective user. In English, French or Portuguese, however, the name Dispo Cockpit was by no means self-explanatory, but rather a tongue twister and in some cases even a nuisance. That’s why we decided to change the name of our product in favor of something that works on the international stage as well.”
Digital transformation also calls for a concept adaptation. “We are furthermore moving away from the modular structure of the GIB Dispo Cockpit which was somewhat organized like a silo. With the GIB suite and GIB SCX, we now offer a consistent and more natural solution for the entire supply chain,” says Dunkel, describing his goals.
“With GIB SCX, we want to avoid isolated innovations in individual areas that are not connected to previous or subsequent processes and therefore often disappear as quickly as they came. By avoiding island innovations, customers achieve holistic optimization and consequently enjoy great economic success.”
Hana, S/4 and Supply Chain Excellence
Naturally, an ERP/ECC 6.0 system with Dispo Cockpit will be very different from an S/4 Hana system with Supply Chain Excellence. This of course begs the question: how long will this digital transformation take GIB customers? How many personnel and financial resources are required for this switch? “We know that for GIB customers it is important to keep tried-and-tested solutions and processes and transfer them to the new digital world through the brownfield approach,” says Bjoern Dunkel.
“Consequently, our goal was always to develop a simple solution that customers can implement without any effort,” adds Dunkel, explaining the digital transformation in customer companies. “Our solution makes it as easy to start the new S/4 Hana environment as plug and play. GIB likes to describe its product offering as a hybrid solution that supports the migration from R/3 to S/4.”
Brownfield customers can therefore rest easy knowing that they can keep tried-and-tested processes. However, GIB also has a revolutionary approach for greenfield customers, as Managing Director Dunkel explains, “If customers are willing to consider greenfield and therefore completely rethink their processes in the new S/4 Hana world, then GIB SCX offers much more than just old wine in new bottles. GIB SCX was created from the experience of over 800 supply chain optimization projects. From these best-practice experiences, we have derived a perfect planning process. Our customers can leverage this expertise to optimize their end-to-end supply chain processes out of the box!”
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