SAP’s SAPinsider supply chain conference was held a week and a half ago in Las Vegas. At this conference SAP announced a new product that will be a critical part of their supply chain solution stack – a Supply Chain Control Tower. Several of ARC’s supply chain software supplier clients have discussed with ARC how their solutions can be used to build control towers (Manhattan Associates Control Tower, C.H. Robinson TMC’s, and JDA’s). Clearly, the term “control tower” is used in many ways by software suppliers.
SAP Supply Chain Solution Stack
Two of our supply chain software clients have also talked about how play books can be used to make better supply chain decisions (JDA’s playbook, IBS’s). What is interesting is that SAP’s conception of what a proper supply chain control tower should look like now includes the idea of a playbook, even though they don’t use that term. Partly for that reason, SAP’s “control tower” is the market’s broadest and deepest conceptualization of this term.
The SAP control tower incorporates end-to-end visibility. SAP understands that the best end-to-end visibility solutions are built upon a many-to-many, public cloud architecture that is built with common network master data. SAP intends to leverage the Ariba Network to build out the visibility portion of this solution.
The idea behind a playbook is that businesses need to plan, but businesses also need to adjust plans based upon unexpected surges or shortfalls in demand and changing supplier capabilities.
An analogy can be made to professional football. A team starts with a play that is called in the huddle, in this case a wide receiver running a post. But professional football teams are able to adjust that play based upon what the defense is doing. So if the opposing team’s safety has moved closer to the line of scrimmage (potential blitz), and the corner-back is playing up on the line of scrimmage (in order to jam the receiver coming off the line), then the play as called will not work unless key players – the quarterback, the receiver, and the fullback – see what is happening and are working off the same playbook. If the offense can execute – the receiver beats the jam and runs straight down the field, the fullback picks up the blitz by blocking the safety before he can get to the quarterback, and the quarterback throws an accurate long ball – then potential disaster turns into a score.
Similarly, it is nice for a supply chain solution to have alerting capabilities. But those alerts serve a limited purpose unless key players across the enterprise or even extended supply chain are working off the same playbook. So for example, if demand for key products exceeds the forecast, one playbook adjustment may be to cancel a planned promotion. But to “score,” the marketing, procurement, and warehousing team members all need to properly execute that play variation.
The SAP solution set allows for alternative scenarios to be examined in their Integrated Business Planning application. After the right response is determined, a history of the logic that went into why that is the best of different alternative responses can be stored.
Once the proper playbook response is developed for a particular type of situation, the business process for responding to that situation can be defined in the control tower. The control tower has capabilities for business process definition and enforcement, social media style collaboration tools, and role definition (defined responders to the problem). Thus, when a particular playbook response is defined – cancel a planned promotion – the responders are defined and the proper marketing executives have the ability to drill down from the control tower to the promotion management or marketing applications where the proper adjustments can be made.
SAP has a great vision. Now they must execute on that vision. There are hurdles. The ability to provide advanced visibility will be related to the size of their supply chain community. Acquisitions to build their network may be called for. The platform will need to include network master data that is not currently part of the solution set. Finally, the visibility component must mirror the kind of value-based pricing common among other providers of supply chain visibility in order to be successful.
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