logsitics S/4 hana leogistics supply chain [shutterstock: 731159185, Sergey Nivens]
[shutterstock: 731159185, Sergey Nivens]
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SAP S/4 Hana As Stepping Stone To The Supply Chain Control Tower

The migration to S/4 Hana, especially considering operational logistics, poses major challenges - both in terms of feasibility and time. The switch from LE-WM and LE-TRA to EWM and TM is not really a migration, but rather a completely new implementation.

The changeover opens up the opportunity for reorientation. Customers would do well to reevaluate their supply chains, integrate partners, and use innovative approaches to establish a state-of-the-art logistics solution. Making logistical information accessible and transparent adds value for customers, increases the service level, and even saves costs. A holistic supply chain control tower can serve as a model. Unfortunately, many still see it as a software product, even though it is more of a philosophy for looking at operational logistics.

Being open to new things and optimizing logistical processes is a great first step for any company to become more flexible regarding their supply chains. However, implementing S/4 and Hana first requires a clear goal. This makes it easier to prioritize expansion stages and create a realistic schedule. Furthermore, automation in transport planning, freight cost management, and warehouse logistics can lead to advantages in operational processing and reduced costs.

Creating competitive advantages

In order to access information along the entire value chain, visualizing and linking it to business logic is key, as this enables active intervention in logistics processes. Avoiding media discontinuities is an imperative. To this end, it is important to break up monolithic IT systems and structures in order to be able to map business processes in an end-to-end integrated manner.

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Unfortunately, the reality often looks vastly different: Warehouse and transport are viewed separately, and plant logistics is only considered as a marginal process. If the processes are coordinated, there is great potential for automation and optimization. For example, transport requirements from different departments could be collected in S/4 TM and planned in an optimized manner regarding cost, time, and resources. The result would be automatically made available to and processed in SAP EWM, ensuring that communication with service providers takes place in real time and updates are distributed to all involved parties.

Plant logistics, often declared as a marginal process, has to be actively integrated as well. Time window planning tailored to transport and storage capacities supports processing on the yard and reduces throughput times. ETA-based track-and-trace provides early information on whether trucks will arrive on time, making it possible to reschedule gate assignments and automatically reprioritize freight orders. Moreover, peripheral and hardware-supported check-ins, contactless communication with drivers, and digital checklists and transport documents lead to cost savings. Loading changes due to damage or the like are digitally recorded and processed in EWM and TM. This ensures correct inventory management and freight cost calculation based on the loaded freight. Using track-and-trace information, the data can be enriched with event-based costs and settled in SAP FI/CO. 

Leveraging data in a meaningful way

If operational logistics processes are holistically mapped and integrated, upstream and downstream systems are taken into consideration. Furthermore, suppliers, service providers, customers, and other partners are integrated, enabling companies to prepare the information in their supply chain control tower and leverage it in a meaningful way. However, this is not standard software! A supply chain control tower is not a program but an interaction of technology, software, and mindset. The implementation of such an approach involves a large number of participants due to the vertical process integration. A good communication strategy is the key to success here. This way, individual improvements are easier to notice and users have the opportunity to gradually adapt to the changed processes.

Time and again, however, we sense resistance from customers. A lack of incentives for business ensures that digital transformation is sat out rather than embraced as an opportunity for positive change. Leogistics has recognized this problem and developed methods to break down barriers. With the 360° logistics platform myleo/dsc, we offer a framework for a holistic supply chain control tower that enables end-to-end processes across system and process boundaries. Through open interfaces, business partners, platforms, telemetry, sensors, and hardware can be connected easily and quickly. TM and EWM are the link between the planning and operational levels.

Source:
E-3 Magazine March 2021 (German)

About the author

Michael Roelli, Leogistics

Michael Roelli is Global Pre-Sales Lead Digital Supply Chain at Leogistics.

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