Supply Chain Excellence

Supply chain management is in vogue and in an end-to-end process crucial for business success. E2E business processes are the answer to the new, global and 24×7 economy.

These supply chains are also the core competence of industrial and trading companies, both in medium-sized enterprises and global corporations.

Research and advisory firm Gartner has unveiled a ranking of the top 15 European supply chain companies for 2019. The top five are: Inditex, Nestlé, Schneider Electric, Diageo and L'Oréal.

The ranking names the leading supply chain companies in Europe and their best practices. The result of this year's ranking was presented at the Gartner Supply Chain Executive Conference in Barcelona this year.

"European supply chain companies continued to show strong performance in 2019. They demonstrated an exemplary and demand-driven management style and corporate social responsibility"

Michael Youssef, senior research director at Gartner, explains.

"Aside from sales targets, the leading companies are focusing on activities aimed at people and protecting the planet. Nine out of 15 companies even achieved the highest score of ten in the CSR category." (Inditex, Nestlé, Schneider Electric, Diageo, H&M, Novo Nordisk, BMW, Nokia and Danone).

Heavyweight: SCM

In terms of business management, organization, technology and corporate social responsibility, SCM is of paramount importance. GIB's answer therefore also has a defining name: Supply Chain Excellence.

At SAP's second quarter 2019 financial press conference, Bill McDermott also emphasized the importance and success of SAP's supply chain.

"We clearly see ourselves as a partner of SAP".

explains Björn Dunkel, Managing Director GIB.

"With our core product of the GIB Suite, we have always been able to perfectly complement SAP logistics. This applies on the one hand to the operational approach that our GIB Suite realizes, but also to the target group," defines Dunkel in the E-3 interview.

"We are clearly focusing on small and medium-sized businesses, and here we offer supplements to the SAP system that provide great added value in terms of finance and personnel.

With our new Suite-SCX - Supply Chain Excellence - we build on the digital core of SAP S/4 Hana and then deliver a new holistic operational planning approach on-premise. In doing so, we simplify architecture and application. In that sense, we would even consider ourselves an enabler for S/4 and Hana!"

Competitive advantages

For some time now, SAP has been urging top management to finally address the issue of SC optimization in order to secure and expand long-term competitive advantages. Important buzzwords here are cost leadership, world class manufacturing and lean management.

"The harsh reality is that many companies have long failed to recognize that supply chain optimization is the central screw for sustainable business success"

Björn Dunkel describes the current situation.

"We clearly notice in our midmarket that awareness is growing"

is optimistic about the future.

"At the same time, however, we recognize that the complexity of the issue creates perplexity. Where should the lever be applied first? We see our task as breaking down and simplifying the large block of tasks.

With our GIB-SCX indicator, we show the maturity level of the internal supply chain using a specially developed key figure. From this, it can be clearly derived which process step should be focused on most urgently."

The optimization of supply chains and production takes on lasting significance under the buzzword "Industry 4.0": Is Industry 4.0 really the qualitative step forward and if so, why?

"All kinds of things are subsumed under the term Industry 4.0 today".

says Björn Dunkel.

"For our business, the core of Industrie 4.0 is the digitalization of the horizontal supply chain and the vertical connection of the production level."

Where are the strengths of supply chain excellence? In horizontal or vertical value creation?

"Our strength clearly lies in the horizontal supply chain process. Over the course of more than 25 years, we have accumulated so much expert knowledge and gained so much practical experience in intensive collaboration with our customers that it would be presumptuous to claim that we already have this know-how in the vertical connection of the value creation levels"

defines Managing Director Dunkel.

"Nevertheless, in cooperation with our parent company ifm, we have managed to develop a unique connection between the worlds that is perfectly integrated in SAP.

In the future, therefore, the connection of the vertical and horizontal levels will certainly be a key USP of GIB-SCX. We are working on this at full speed."

Generally speaking, digitization and the networking of things, people and machines offer great potential and thus bring greater effectiveness to industrial interaction. At the same time, these gigantic opportunities present SMEs with a flood of data and information that is almost impossible to manage.

"Our goal is to turn Big Data into Smart Data. We want to provide the right information to the right person at the right time and in the right place. In this way, the customer not only remains capable of action, but also works effectively on optimizing its supply chain processes."

Dunkel says.

"Real time" and Hana

SAP praises Hana for its real-time capability. Now the question is whether "real-time" is also an added value for SCM? Is GIB planning a real-time capable supply chain based on Hana?

"When we talk about vertical networking of the supply chain, i.e. connecting production data, we have to be careful with the term 'real-time'"

warns Björn Dunkel in an E-3 interview.

"In our ERP world, we already speak of real-time when the data is not first temporarily stored in the working memory and then evaluated, but when a transaction directly accesses the database in Hana and operates there with the current dataset.

In production, however, real-time means that information and, if necessary, reaction occur at the moment the event occurs."

In the process, data volume and speed get in the way and dark means:

"We're trying to balance the need for speed in production with the need for a database in control."

From R/3 to S/4

The switch from R/3 to S/4 and Hana is taking place only hesitantly on the market. Wouldn't GIB therefore be better off putting its strength and potential into proven technology instead of wasting scarce resources on a technology that offers an uncertain return on investment?

According to the DSAG Investment Survey 2019, it will still take time for the majority of existing SAP customers to be transformed to Hana and S/4.

"GIB can indeed look back on many years of successful software development in the environment of R/3 technology.

I would even go so far as to say that our proven GIB suite is almost programmed out. We have reached a level of maturity here that leaves very few wishes unfulfilled".

Björn Dunkel explains the current market situation.

"However, we have no shortage of ideas on how we can support our customers even better. We already have, in addition to the great metric that reflects the overall maturity of the supply chain, see SCX indicator, other first-class developments in the quiver, such as a KPI tower and a WCM tool."

However, GIB knows that these new solutions cannot be developed sensibly in the R/3 world. For this, the new SAP technologies are needed.

"For us, it is clear that the future is S/4 Hana".

White Dark.

"From 2020, we will only develop in this new environment. There will only be a downgrade after clear cost-benefit considerations and certainly in the context of a feasibility check. So for us, S/4 core is a key pillar of our product strategy."

How is Supply Chain Excellence leveraging the Hana offering? Björn Dunkel:

"The idea of digital core S/4 was born independently of database technologies available at the time, which sanctioned and constrained the existing R/3 system.

The technical requirement for a modern and powerful ERP system was in the foreground. Thus, the technology followed the logic, i.e. the database architecture followed the software requirements.

In the supply chain, we have the opportunity to analyze and control almost in real time with Hana technology. This allows us to reliably and quickly simulate the cause-and-effect relationship and make secure economic decisions on this basis."

Among other things, GIB argues the need for a "new" supply chain with the demand for more agility, transparency and process maturity.

Have we made so many mistakes in the past that everything has to be "new" now? Does SCM need to be retreaded?

"It's not the supply chain that's new, it's the ability to interconnect the links in the chain that's new"

Björn Dunkel specifies.

Networking has only become possible through digitalization, modern communication and new technologies. Industry 4.0 is largely based on new data paths and communication tools that connect the sensors from the factory with the back office.

"We want to take what we've learned and matured into this new world, use the experience even better and 'across silos'"

Dunkel explains the new SCM era.

"At the same time, we need to respond more quickly to outside demands."

The general view is that this is the market expectation that has emerged in the course of digitization and networking. Modern companies can only meet these challenges with transparent processes, by seeing where the shoe pinches, and through agility in thought and action - precisely the digital transformation.

From the Dispo Cockpit to SCX

GIB, like the vast majority of SAP inventory customers, has a very successful past: The most successful product to date has been the GIB Dispo Cockpit with various features such as Forecast, Controlling, Operations, Buying, Planning and Inventory Management as well as Replenishment Planning.

The current GIB roadmap shows that the topics remain the same, but the dispo cockpit is disappearing. Is this the GIB transformation process?

"As the GIB brand has globalized, it has become clear that the name of our core product, Dispo-Cockpit, no longer does justice to the company's global approach"

Björn Dunkel explains the starting position.

"This has also been reflected to us by our new colleagues in our subsidiaries in the USA, the Netherlands, France, Switzerland, Italy and Brazil.

In German, the name sums up very well what our software solution can do and what it is all about. All important displays and controls are clearly arranged and available at a glance, and are also precisely tailored to the respective user.

In English, French or Portuguese-speaking countries, however, this name was by no means self-explanatory, but rather a tongue twister. We therefore decided on a name change that would work internationally."

There will also be a conceptual adaptation to the digital transformation:

"We are also moving away from the modular structure of the GIB-Dispo-Cockpit, in which we ran all processes through a kind of silo structure, and are now offering an end-to-end and more organic solution for the entire supply chain processes with the GIB-Suite and with the GIB-SCX"

Dunkel describes his goals.

"In this way, we clearly want to avoid 'island optimization' in individual areas, which has no interconnection with the preceding or subsequent processes and thus often fizzles out. In this way, holistic optimization can succeed, which also achieves the greatest economic success."

Hana, S/4 and SCX

An ERP/ECC 6.0 with the Dispo Cockpit will be very different from an S/4 with Hana and with Supply Chain Excellence. How long will such a digital transformation take for GIB existing customers? What personnel and financial commitment is required for this?

"For our existing GIB customers, as previously noted, it is important that the tried and true can be taken into the new world in a brownfield approach"

Björn Dunkel assures.

"We have put a lot of effort in development to provide our customers with a simple solution that they can implement without any effort"

Dunkel explains the digital transformation at its customers.

"Thus, a start into the new S/4 world is possible as plug-and-play. At GIB, we talk about a hybrid solution that supports the migration from R/3 to S/4."

However, there is also a revolutionary approach, as GIB Director Dunkel describes:

"If the customer follows a greenfield approach and is willing to rethink its processes under S/4, then with GIB-SCX we offer much more than just old wine in new bottles. GIB-SCX contains the experience from over 800 SAP supply chain optimization projects.

We have derived a 'perfect planning process' from this best practice experience. This can be used by our customers to perfect their supply chain end-to-end and out of the box."