Successful supply chain management is and always has been an optimized combination of human skills and intelligent machines. Efficient distribution of tasks adds value to a company’s processes. With decades of experience, GIB builds on and complements the SAP ERP system. E-3 Editor-in-Chief Peter M. Färbinger talked to GIB’s Bjoern Dunkel and Volker Bloechl.
Requirements and challenges in logistics and supply chain management include smart factory, automation, artificial intelligence and robotics. IT development knows no boundaries when it comes to technology. It is an evolutionary path and not disruptive customizing. Based on this insight, a unique SAP-based system has been developed at GIB over the past few years, which incorporates decades of knowledge in MRP, logistics and supply chain.
The dynamics and learning ability of GIB Supply Chain Excellence result in great advantages: Flexibility, quality improvement and precision ensure an increase in performance. However, software should not replace users, but rather support them in their day-to-day tasks. For GIB, the cooperation between technology and humans plays a crucial role.
Global supply chains will continue to determine production, logistics, supply chain and distribution in the future. The various processes have to be tightly coordinated. In order to get a grip on supply chain complexity, intelligent controlling of all users in the process chain is necessary, which requires a cooperative network structure. In addition, these value chains should be viewed holistically, which includes network-oriented management.
Who is better at managing the supply chain? Interconnected users or the algorithms of GIB SCX? “As complex as this question may seem, the answer is simple,” says Bjoern Dunkel, one of GIB’s Managing Directors. “The GIB Supply Chain Excellence Indicator creates problem awareness. System-inherent intelligence makes the complexity of end-to-end supply chain planning manageable.”
GIB’s APEO principle, Analyze, Plan, Execute and Optimize, simplifies operations by addressing the right information the right way, in the right volume, in the right places and at the right time – meaning CLUI, context-based, location-based, user-based Information. “This empowers people to do the right thing quickly and in the right way. Consequently, the users are still the ones who control the system and thus the supply chain,” explains Bjoern Dunkel.
Again and again, the user goes through the APEO principle. The software regularly analyzes the quality of the planning process and enables the user to plan even more precisely in the next planning process. The simulation and saving of scenarios help to get closer to the optimal result. Only then can a plan be put into practice. Daily business and operation become more manageable. The aim is to provide the user with as much comfort and security as possible. The fourth and final step in the APEO principle is the optimization phase, in which actual and target values are compared and the necessary steps for improvement are defined.
This fosters positive competition between humans and machines: In chess and Go, humans have already been beaten, but can we still master ERP and SCM? GIB Managing Director Bjoern Dunkel said in an E-3 interview, “ERP and SCM differ from Chess and Go in the fact that one has the goal of dominating and defeating one’s opponent at the heart of the game, purely for fun, while ERP and especially SCM aim to connect processes to control and plan a joint success! IT is the lowest common denominator of this comparison, and in the end, in both cases, it serves to support human beings in their actions.”
ERP users’ actions are sometimes chaotic or even disruptive – not intentionally, but not everyone succeeds in monitoring and controlling more than seven parameters. People tend towards “repair service behavior” – if they recognize an error, they are strongly committed to correcting it without looking at any other steps in the same process. However, it would be better to see the big picture in this case, to analyze the system holistically. Does GIB want to correct this behavior with SCX? “That is exactly the idea,” emphasizes Bjoern Dunkel. “A supply chain is only as strong as its weakest link. However, it usually gives us numerous warning signals before it finally breaks.”
The “A” in the APEO principle stands for analysis. Bjoern Dunkel explains that the GIB SCX process indicators show the respective process maturity level: starting with the processes concerning demand, manufacturing, procurement, inventory, sales and distribution planning. “All these processes combine in a filigree way”, recounts Bjoern Dunkel from practical experience.
Repair service behavior
“What is the goal of every supply chain plan?” asks GIB Managing Director Dunkel in an E-3 interview, and gives the answer himself: “To be able to 100 percent meet customer requirements in time and quantity! If the sales and distribution planning process is only at 73 percent, the error is usually hiding in upstream process steps. Thanks to the process indicators of GIB SCX, users now have a clear picture of where immediate action is needed. This enables them to meet their repair service requirements.”
GIB SCX supports users with a personalized guiding function: The system shows the user in which process and at which point in the process the error occurred. SCX gives recommendations for action and opens the SAP transaction with which the error can be corrected. The entire process takes place in real time based on SAP master and transaction data, which are evaluated by GIB’s own heuristics.
How do you define the ideal supply chain? Volker Bloechl: “Users could score points with KPIs from many different areas. Maybe some readers would even be fascinated or impressed by how many KPIs there are. But does it really make sense to pin countless KPIs to the bulletin board and hope that this is incentive enough to improve supply chain processes?”
Volker Bloechl explains further, “Especially when we talk about the supply chain as a whole, we need a metric that measures the entire process. This is the only way to counteract silo thinking. If you ask yourself, for example, what the ideal order quantity for the company is, it quickly becomes clear that the answer can only be found across functions and departments. We believe that our SCX Indicator, which is calculated and reported based on individual processes, gives our customers the right view on their supply chain management. Of course, there are companies in our customer base that have long been involved in optimizing their SCM. Many of these customers use our GIB Suite merely to get a firm grip on processes, from sales planning to finite capacity planning and controlling. However, I am convinced that these companies also need SCX, because the demands on the supply chain are constantly changing.”
KPIs and SCX Indicator
For existing SAP customers, availability and quantity are important decision-making components. Why do ERP users never seem to find the right KPIs in their S/4 Hana systems? “In all modern ERP systems, we are overwhelmed with KPIs,” says Volker Bloechl, drawing on his experience from many successful customer projects. “If we look at the modern supply chain, we will find many KPIs in all areas. However, when we ask ourselves whether we are successful, it is not enough to have a great KPI score in just one area of the process chain. Only when we combine and prioritize different KPIs does a good score become really exciting. Shouldn’t it be our ambition to become better in the process as a whole?”
Ultimately, it’s all about dynamic processes and networked systems, so static state variables are only of limited help. The challenge is to optimize end-to-end processes. GIB Managing Director Volker Bloechl says: “It’s all about understanding, designing and optimizing. Understanding is the necessary foundation for design and optimization. With our SCX Indicator and the five process indicators, we show companies their current status. We hold a mirror up to SAP users, but we don’t just want to visualize the current situation, we want to guide users to critical processes with intelligent navigation. We thus offer a strategic, holistic view and operational action.”
SCX users can choose whether to navigate using process indicators or the Process Explorer, which, depending on the employees’ role in the company, leads directly to the transactions that need to be processed urgently without any delay. Only when the supply chain managers refocus on the process and don’t waste valuable time managing the system can the optimization process start and succeed. “Otherwise we’ll all remain firemen, reacting when the damage has already been done,” emphasizes Volker Bloechl, “and who wants to save the world every day? So, let the systems do the work and drive your optimization in SCM forward.”
In recent years, the SAP community has often discussed the benefits and feasibility of digital twins. Generally speaking, creating a digital twin without ready-made software components is a Sisyphean task, but hardly anyone doubts the benefits of a functioning digital twin. GIB Supply Chain Excellence kind of functions as a digital twin of the supply chain, right? Volker Bloechl is initially surprised by the question, saying, “I have to confess that I’ve never thought about it. But I would definitely say yes, SCX works like a digital twin.”
When talking about digital twins, simulation of dynamic systems shouldn’t be neglected. “With regard to simulation, I would like to think that many of our customers have lost their initial skepticism in recent years, and simulation is now indispensable from a process perspective. What if? We have already had this perspective firmly embedded in our solutions for many years,” explains Volker Bloechl.
Simulation and transparency
Transparency is the order of the day. Does GIB SCX actually make supply chain processes more transparent? Volker Bloechl notes: “Yes, our tools make our customers’ supply chains more transparent. However, our focus point is to help customers adjust and optimize important processes as efficiently as possible and to support them in becoming better and better as their understanding of the whole process deepens – including comprehensive feedback, because the SCX Indicator directly documents the improvements.”
“Transparency and the resulting decision-making reliability are the foundation of successful supply chain management,” explains Bjoern Dunkel. “We have managed over 800 SAP supply chain projects in a wide range of industries. Based on this knowledge, we have integrated a solution into the digital core of SAP S/4 Hana that supports best-practice end-to-end planning processes.”
It typically takes 50 project days for GIB SCX to be installed, customized to the customer’s system (plus necessary employee training), and put into operation. Directly after the installation is completed, companies can already access the GIB SCX Indicator and other process indicators. “Thus, thanks to the highest possible transparency, we directly create problem awareness to show companies where immediate action is needed. Consequently, every existing SAP customer can optimize their supply chain process together with GIB,” concludes Bjoern Dunkel.
In ancient Greece, “helmsman’s art”, commonly referred to as cybernetics, was a highly respected art of sailors when it was necessary to navigate a ship safely across the sea. Modern cybernetics deals with the control circuits and systemic control of complex organisms and machines.
Is GIB SCX a cybernetic system for SCM and logistics? Does a system, consisting of S/4 Hana and GIB SCX, master helmsman’s art? “I really like the comparison,” says Bjoern Dunkel in an E-3 interview. “At GIB, we talk about horizontal digitalization. It connects business processes and brings more speed into the control of the process chain. Thanks to the architecture of SAP S/4 Hana systems, orchestration and acceleration are possible. SCX is the steering wheel in this analogy; a steering wheel of the latest generation, with all the tools to navigate safely and purposefully even in stormy weather and fog. Our software is therefore the cybernetic system and the user the cyberneticist, i.e. the helmsman. By simplifying the processes, we ensure better control and make successful companies even more successful.”
Expert and manager
This leaves one final question: Is GIB SCX the tool for experts along the supply chain or for the company’s strategic management? “I would like to emphasize our vision again: We make supply chain processes controllable,” says GIB Managing Director Volker Bloechl. “That certainly won’t work if you don’t roll up your sleeves and get to work!”
The great benefit of SCX lies in strategic perspective, user-friendly operation, and – of course – the combination of both. “Our goal is to bring exactly that to the market, in order to reach every user within a dedicated area, along with experts who have the global view over supply chain processes,” Volker Bloechl explains. “Our tools can be individually adjusted to the role definition of a company’s users. Consequently, we can use functions and user interfaces to tailor the access of users who are responsible for only a small area in the value chain.”
The intelligent SCX navigation guides employees in their processes to make the right decisions with the right data. “Simple and practical, as our vision promises,” emphasizes Volker Bloechl. “Away from endless transaction calls, away from Excel spreadsheets that hardly anyone can decipher, away from shadow systems such as Access and others, and towards effective tools – no matter what area of the supply chain you are in.”
This is the first article in a series. If you would like to read the second one, click here.