S/4 as a springboard to the Supply Chain Control Tower

The migration to S/4 Hana in the area of operational logistics poses major challenges for companies - both practically and in terms of time. However, the change from LE-WM and LE-TRA to EWM and TM is not a true migration, but rather a new implementation.

The changeover also opens up the opportunity for realignment: It is worth taking a holistic view of the supply chain, integrating partners and approaching a state-of-the-art logistics solution with innovative approaches. After all, those who make logistical information transparently usable are not squatting like a spider in a data web, but are creating added value for customers, increasing the service level and even saving costs.

A holistic supply chain control tower can serve as a guiding principle, which unfortunately many still see as a software product - but which is rather a philosophy for looking at operational logistics. Openness to new things and the optimization of logistical processes can help any company to act more flexibly along the entire supply chain.

However, a realignment with the introduction of S/4 and Hana in the area of operational logistics first requires the development of a target picture. This makes it easier to prioritize expansion stages and create a realistic schedule. And: Automations in transport planning, freight cost management and integrative aspects in warehouse logistics enable advantages in operational processing and can lead to reduced costs.

In order to access information along the entire value chain, visualize it and link it to business logic so that it is possible to actively intervene in logistics processes, it is necessary to avoid media discontinuities.

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. Unfortunately, the reality often looks different: Warehousing and transportation are viewed separately, and plant logistics is only considered as a peripheral process.

Create competitive advantages

If the processes are coordinated with each other, there is great potential for automation and optimization: In a holistic approach, transport requirements from different disciplines are collected in S/4 TM and planned in a cost-, resource- and time-optimized manner. The result is automatically made available to SAP EWM and processed; communication with service providers takes place in real time, and updates are distributed centrally.

Plant logistics, which is often declared a marginal process, must be actively integrated here. Time window planning tailored to transport and storage capacities supports processing in the yard and reduces throughput times. ETA-based track & trace provides early information on whether trucks are delayed, gate assignments can be rescheduled, and freight orders can be automatically reprioritized.

Peripheral and hardware-supported check-ins, contactless communication with drivers as well as digital checklists and transport documents lead to savings in process costs. Loading dialogs ensure correct loading; changes resulting from damage or the like are recorded digitally and written back in EWM and TM.

This ensures correct inventory management and freight cost calculation based on the loaded freight. Using track & trace information, this can be enriched with event-based costs and settled in SAP FI/CO.

Using data profitably

If the processes of operational logistics are mapped in a holistically integrated manner, upstream and downstream systems are considered in the big picture, and suppliers, service providers, customers and other partners are integrated, the information can be visually prepared and used meaningfully in a supply chain control tower.

However, this is not standard software! A supply chain control tower is not a program, but an interaction of technology, software and mindset. A large number of stakeholders are involved in the introduction of such an approach due to the vertical process integration. A good communication strategy is the key to success here.

Individual improvements can thus be recognized by everyone 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 the business unit ensures that digitization is sat out rather than embracing the opportunity for positive change.

Leogistics has recognized this 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. TM and EWM are the link between the planning and operational levels.