Simple logistics with SAP S/4 HANA – a shift from delivering products to delivering outcomes

22 September 2015

Catherine Wade

Catherine Wade

Consultant

With Simple Finance, the first suite built on SAP HANA, we are already seeing how it is possible to run simple in the digital economy due to the innovation that the SAP HANA platform brings. With the release of Simple Logistics later this year, what can we expect these innovations to bring to business, and how will they facilitate the move from delivering products to delivering outcomes?  

Delivering customer outcomes

In the past customers were happy to place an order and receive the goods. It may sound simple enough for any business to achieve this, but the complexity of the supply chain, lack of real time data and the communication barriers across business functions all make this seemingly simple process much more difficult to achieve. 

Unfortunately, business processes that have been built around long running batch processes are very limited and do not deliver what is needed to succeed into today’s digital world. When organisations that are limited to daily or weekly production planning, order fulfilment and delivery, their ability to adapt and change is compromised. More importantly, their ability to provide what their customers truly want is reduced.

Now, digital technology and analytical tools are becoming more sophisticated, meaning we have a wealth of new data sources and information at our fingertips.  How we use this data to identify and define customer expectations is crucial to business success as it will lead to delivering successful customer outcomes that increase loyalty and and deliver appealing revenue-producing products.   Smart customer interaction is the driving force in understanding customer expectations and therefore analysis is needed to understand:

  • What are our customers’ goals?
  • How can we help our customers achieve them?

Once this is understood organisations can optimise this to differentiate themselves from their competition.  The capacity of S/4HANA to facilitate business process innovation, thanks to its speed, simplicity, agility and usability, will allow organisations to increase their flexibility. In turn, organisations will be better equipped to meet customer needs and offer the service that customers expect in this digitized world.  So let’s look at some of the features and benefits that SAP Simple Logistics will deliver.

Simple logistics

Logistics in ERP was designed for the purpose of recording transactional data, and focused on making transactional processing more efficient.  This allowed users to identify issues within their process and take corrective action, but a high degree of knowledge and expertise was required to analyse the issues and evaluate potential solutions. Often, a sub-optimal solution is settled for, as users do not have enough time or real-time data to make the right decisions.

Simple Logistics in S/4 HANA transforms logistics from a “System of Record” approach to a “Decision Support System” by utilising data in a much more proactive and intelligent way.  This is made possible by the innovation that the HANA platform brings. Additionally, the integrated scope of Simple Logistics, which sits alongside the core ERP functions, is complemented by the capabilities from SCM, CRM, PLM, SRM as well as support for technologies and concepts of value chain organisation (Industry 4.0).

The ability to foresee and react to customer needs will be made possible, complex processes will be automated, innovation will be accelerated and product configuration possibilities will be expanded. Organisations will have immediate visibility of customer changes and the ability to respond to these changes, thanks to a digitised core.

Empowering users

Simple Logistics will empower users to make business decisions by proactively analysing real time data, signalling alerts and providing potential solutions.  If we consider the Production Planner dealing with a product shortage they are currently required to analyse reports, obtain data that resides in ERP (but is not readily available), wait for material updates via batch job processing, await overnight interface from 3rd party warehouse, and so on. But with Simple Logistics, this time-intensive process will no longer be required and the user will be freed up to focus on their actual role.

Transforming the business and user experience

The SAP Fiori user interface will bring together the most relevant data and information required for a user to perform in their role.  Gone is the need for users to remember numerous transactions, as the cockpit with its tile-based apps is a simple and easy-to-use interface available on all devices.  The idea is to ensure the needs of each business role are met by bringing together all the relevant information required to carry out that role (and nothing superfluous). For example, in Sales Order Fulfilment, as well as being notified of a shortage alert, the user will be provided with relevant data and information from finance, logistics, procurement and production in real time. This data will enable them to identify the optimum solution from the system proposed solutions.   With the click of a button a user can see the predicted impact of fulfilling a more recent, more profitable order by simulating the proposed solutions.

Effective collaboration

Customers are our bread and butter and we need to listen to them in order to understand where we need to be. By incorporating social media data, real-time sentiment analysis can be performed to gauge what customers are sharing about the products, promotions, availability, and more. In addition, this information can then be shared via SAP JAM to facilitate collaboration and connect customers, partners, and employees with key information, accelerating the process of solving business-critical problems and driving rapid results in an effective collaborative way.  Imagine how your core customers will feel when you include their input in your future product design and offerings whilst increasing your speed to market.

Why SAP S/4 HANA?

SAP S/4 HANA is the platform that will enable businesses to operate in a proactive and collaborative way both with customers and suppliers, whilst internally, users are provided with the real time data they require to focus on problem solving and taking corrective actions.  Simple Logistics is the catalyst to breaking down the barriers between departments and lines of business. Its simplified data model will increase throughput, whilst the new user interface will provide collaboration and simulation capabilities, ensuring users have the correct insight to make the correct decisions.

This has been a small insight into some of the new innovations brought by S/4 HANA platform as well as what we can expect from Simple Logistics. For a more thorough list of FAQs about SAP S/4 HANA, it is worth reading The SAP® Business Suite 4 SAP HANA® (SAP S/4HANA) FAQ by John Appleby.

And if you'd like to see a preview of what Simple Finance and Simple Logistics look like for an end user in SAP S/4 HAHA, have a look at this demo on Simple Finance and Simple Logistics in SAP S/4 HANA

 

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