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Leading Practices to Measure and Monitor Supply Chain Operations Using SAP Supply Chain Performance Management
Todd R. Smith PwC
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In This Session
• Understand the key constraints to “good” reporting
• Hear about big data trends and the future of reporting
• See how a supply chain interruption can be identified, isolated,
assigned, and addressed
• Learn about the functional capabilities of the SAP SCPM 2.0
solution
• Get an overview of the 7 supply chain performance scenarios,
including perfect order fulfillment, cash-to-cash cycle time, return
on working capital, and more
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What We’ll Cover
• Reporting capabilities and “big data”
• Supply chain management – can you measure performance
today?
• Understanding the SCOR model (scenario-based)
• Solution overview – more than just KPIs
• SCPM demo
• Wrap-up
3
Poll: How Many People Are Satisfied with Their Enterprise Reporting Capability Today?
Yes – we get all that we need
Teach ‘em to fish!
Users just don’t understand
what they need!
Not really …
Why hasn’t reporting matured in 20+ years?
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Reporting Maturity — What’s Stopping You?
Level 1 Level 2 Level 3 Level 4
Reporting Maturity
Governance
Data
Technology
Process
People
Maturity Level 1
• Usually a single system
• Mostly transactional reporting
Maturity Level 2
• Single System
• “Some” BI Reporting
• “Defined” Reports
Maturity Level 3
• Multiple internal systems
• Limited external data
• Some flexibility to “slice and dice”
• Data Governance
Maturity Level 4
• Multiple internal systems
• External systems
• “Big Data”
• Most Flexibility
5
Reporting Challenges and Impacts
Reporting Challenges
• Business complexity is
increasing
• Disruptions in business are
beyond “your 4 walls”
• Business priorities/needs
shift
• Reporting needs change
frequently
Impacts
• Clear strategy, data model, &
data governance is required
• Data feeds, inputs, and
trends from external sources
• Report development cycle
time must be short
• Flexible and fast reporting
strategy
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Big Data and Analytics The Next Wave of Investment
• IDC’s recent Worldwide Big Data and Analytics Predictions for
2015
“Visual data discovery tools will be growing 2.5x faster than rest of
the BI market; investing in this enabler of end-user self-service will
become a requirement for all enterprises by 2018.”
“Faster access to more relevant data and constant experimentation
is creating a further gap between leaders and the rest of the
organizations. It is also creating new challenges for IT and business
leaders tasked with their organization’s big data and analytics
strategy and execution.” (Dan Vesset, Program Vice President for
Business Analytics and Big Data Research)
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What We’ll Cover
• Reporting capabilities and “big data”
• Supply chain management – can you measure performance
today?
• Understanding the SCOR model (scenario-based)
• Solution overview – more than just KPIs
• SCPM demo
• Wrap-up
8
Reporting Strategy Summarized
Business is “hungry” for information and insights
Provide standard and consistent reports that are
relevant to the business user
Types of data and reports vary by user (e.g.,
Executive, Business Unit, Manager, Supervisor, etc.)
Accurate and standard reports drive timely business
decisions
Reporting Business Drivers
Timely and relevant data presented to the user in a
manner that is easy to use and analyze
Standardize the method(s) used for information
delivery and the underlying technology
Provide short-term solutions and capabilities
Ensure that, as data volume and reporting complexity
increase, the solution scales
Reporting Objectives
Data Quality & Governance
Operational/Source systems environment
Performance/speed
Complexity
Resources and Skill Sets
Reporting Solution Strategy
Security
Maintainability, Scalability, and Flexibility
Development Time
Future Roadmaps
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Reporting Strategy Summarized (cont.)
User needs
• User interface, business terms, flexibility, trending, predictive
Strategy and tools
• Cross-organization, BU, geo, role
• External
Data and governance
• Single-source of the truth, common usage
• External data sources
Data Governance & Definitions
Reporting Strategy & Tools
A reporting strategy must be flexible and address multiple aspects
and users to be effective
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Reporting Strategy: Data and Governance
Master Data
Conditional Master Data
Transactional Data
Repo-rting
Key Reference Data or Configuration data
P&L, Sales reports, inventory
Purchase orders, sales orders
Pricing, document routing
Material, customer, vendor
Organization structure, basic settings
Examples
Enterprise reporting lucidity depends on transactional activity
Transactional data depends on conditional data and master data
Conditional data applies only in specific situations (if this customer and material, then this price)
Master data defines the material, vendor, and customer and how they will behave in the system
Configuration data defines your system and the limits of all elements
Provisional
Stable
Static
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Reporting Strategy: Data and Governance (cont.)
Vision and Strategy
Governance
Organization/
People
Process, Procedures, and
Standards
Metrics
Enabling technology
• Establish a clear vision for achieving data excellence
• Vision embraced and supported by Executive Leadership team
• Focus on keeping the data clean is deemed integral to information
visibility
• Business owns the data, IS/IT an enabler
• Finalize approach to data governance. Understand and choose models that
will work for your company/environment/culture.
• Identify and establish data owners/stewards
• Determine need for full-time resources to focus on master data
• Establish processes, policies, and procedures to manage data across its
entire lifecycle
• Develop a comprehensive data profiling/cleansing/monitoring process
• Establish clear standards by object
• Determine need for enabling technology (workflow, notifications, auditing)
• Recognize data cannot be sustained across its lifecycle via emails and
spreadsheets alone
• Establish easy to understand and simple metrics to monitor data quality
(Completeness of record, # of changes to an object)
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Reporting Strategy: Process
• Reporting Process
Establishing an integrated reporting model
Integrated performance management requires top-to-bottom alignment of reports
Must align with the process flows
Alignment of processes, data, and reports provides context to aid indecision making
Data should be captured at the right time and at the right level
Strategic
Directional
Operational
Transactional
Executive
Scorecards
Dashboards
Multi-dimensional
KPIs
Details
The growth from providing information (details and KPIs) to
Dashboards and Scorecards requires context to provide insights
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Reporting Strategy: Process (cont.)
• Highly aggregated data
• Highly cross-functional
• External data integration
• Longer time horizon (multi-year)
• Aggregated data
• Cross-functional
• Analytical capabilities – targets/trending
• Medium time horizon
• Detailed Reports/Canned Reports
• Near real-time
• Process-specific
• Short time horizon
Strategic
Directional
Operational
Transactional
Executive
Scorecards
Dashboards
Multi-dimensional
KPIs
Details
The various levels align to different User groups and drive different
reporting needs with respect to timing and content
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Reporting Strategy: Process (cont.)
• Reporting Strategy
• Approach:
Don’t focus on the reports,
focus on the scenario
Strategic
Directional
Operational
Transactional
Executive
Scorecards
Dashboards
Multi-dimensional
KPIs
Details
The growth from providing information (details and KPIs) to
Dashboards and Scorecards requires context to provide insights
15
Data
So
urc
e
Reporting Strategy: Technology
Rep
ort
ing
Pla
tfo
rm
Platform
Management Engines
Search &
Discovery
Data
Management
Platform
Services
Crystal
Web
Admin
Security
Systems
Storage
Schedule
Metadata
Management
Data
Quality
Master Data
Management
Data
Integration
Search & Discovery
Ad hoc
Reporting
Report
Production Report
Develop
Dashboard Advanced
Analytics
ERPs Data Marts External Partners
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What We’ll Cover
• Reporting capabilities and “big data”
• Supply chain management – can you measure performance
today?
• Understanding the SCOR model (scenario-based)
• Solution overview – more than just KPIs
• SCPM demo
• Wrap-up
17
Supply Chain Council and the SCOR Model
• The Supply Chain Council (SCC)
An independent, non-profit, global organization organized in 1996 by legacy PRTM and AMR
The Supply Chain Operations Reference (SCOR) model helps manage a common set of business problems through a standardized language, standardized metrics, and common business practices which accelerate business change and improve performance
Business Management Challenges:
Strategy Development
Merger, Acquisition, or Divestiture (companies or
supply chains)
Supply optimization and re-engineering
Management alignment
New business startup (company or supply chain
startups)
Benchmarking
Process Outsourcing
SCOR helps solve the top 5 Supply Chain
Challenges:
Superior Customer Service
Cost Control
Planning and Risk Management
Supplier/Partner Relationship management
Talent
Source: www.apics.org/
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SCOR Model Metric Taxonomy and Scenarios
• Business scenarios supported:
Perfect Order Fulfillment
Order Fulfillment Cycle Time
Supply Chain Management
Costs
Cost-of-Goods Sold
Cash-to-Cash
Supply Chain Fixed Assets
Working Capital
Perfect orderfulfillment
Order fulfillment cycle time
Supply chain management costs
Cost-of-goods sold
Cash-to-cash
Working capital
Supply Chain Performance Management
Supply chainfixed assets
The SCOR model supports end-to-end business needs and
provides a common definition for nearly 400 KPIs
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SCOR Taxonomy
• The boundaries of any model must be well defined
Deliver Source Make Deliver Source Make Deliver Source Make Deliver Source
Plan Plan Plan
Return Return Return Return Return Return Return Return
Supplier’s
Supplier Supplier
Internal or External Your Organization Customer
Internal or External
Customer’s
Customer
Source: www.apics.org/
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What We’ll Cover
• Reporting capabilities and “big data”
• Supply chain management – can you measure performance
today?
• Understanding the SCOR model (scenario-based)
• Solution overview – more than just KPIs
• SCPM demo
• Wrap-up
21
Definition and Alignment
• Performance Analytics defined:
Scorecard – measurement of “top level” performance which aligns with a business perspective and objective. Scorecards are generally comprised of multiple dashboards.
SCOR model Level 1
Dashboard – measurements of “mid-level” performance. Dashboards generally are linked together to create a scorecard. Dashboards are generally comprised of multiple KPIs.
SCOR model Level 2
KPIs – measurements of execution performance. KPIs are the “lowest level” of performance measurement.
SCOR model Level 3
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SCOR Hierarchy Example
Order
Management
Cost
Material
Acquisition
Cost
Planning and
Finance Cost Level 2 Metrics
Finished Good
Warehouse
Cost
Customer
Service Cost
Outbound
Transportation
Cost Level 3 Metrics
Express
Freight Fuel Cost Returns
Invoices
Outstanding Diagnostic Metrics
-
Strategic Goals
Perfect Order
Fulfillment Level 1 Metrics
+
Supply Chain
Management
Cost
+
Supply Chain
Effectiveness
-
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What We’ll Cover
• Reporting capabilities and “big data”
• Supply chain management – can you measure performance
today?
• Understanding the SCOR model (scenario-based)
• Solution overview – more than just KPIs
• SCPM demo
• Wrap-up
24
Supply Chain Performance Management (SCPM)
SAP Supply Chain Performance Management analytic application helps you track performance, diagnose
bottlenecks, assess risks, and uncover new opportunities. While gaining visibility into supply chain
performance and operational dependencies, you’ll benefit from reduced costs, increased working capital,
and greater customer loyalty.
• “One source of the truth”
• Gain insight based on data in one repository
Single data repository
• Understand the disruptions and make corrections based on impact analysis
• Share & assign analysis
• Closed loop communications
Root-Cause Analysis
• Identify deviations based on trends, plan versus actual, benchmarks
• Assign owners for actions Alerts
• Structure
• Expandable
Reporting Strategy
• Nearly 20 years of Industry content
• Nearly 400 KPs predefined
Leading Practice
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SCPM Overview
• Structured reporting strategy out of the box
Standardized User Interface
Seamless integration from Executive Scorecard to
Transactional data
Users can quickly “slice and dice” their data
• Data definitions are defined
Provides nearly 400 KPIs – predefined data definitions
Expandable and adaptable
SCPM provides a robust reporting solution that addresses multiple
reporting issues and constraints the clients face today
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SCPM Technical Landscape
• SAP SCPM v2.0 is one of SAP’s solutions for overall supply chain
analytics that is based on the SCOR model
SAP ECC SAP ECC Non-SAP Benchmark
Data
SCPM
Portal
Planning
Books
SCPM
Portal
SAP BW
Back End
Reporting
Area
Staging
Area
Multi-Cube
Actuals Cube Planning Cube Benchmark Cube
Data Stage Data Stage Data Stage
Data Stage Data Stage Data Stage
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SCPM Demo
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SCPM Solution Summary
SAP’s SCPM provides:
Data governance (if you have not customized SAP)
Multiple end-to-end scenarios; top-to-bottom reporting strategy
Considers the user and the presentation
Leverages standard SAP BW/BusinessObjects technology
Leverages standard SAP Security
Level 1 Level 2 Level 3 Level 4
Reporting Maturity
Governance
Data
Technology
Process
People
SCPM Fits
“best” here
If you have licenses for SAP BW and SAP BusinessObjects, you
probably have SCPM!
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What We’ll Cover
• Reporting capabilities and “big data”
• Supply chain management – can you measure performance
today?
• Understanding the SCOR model (scenario-based)
• Solution overview – more than just KPIs
• SCPM demo
• Wrap-up
30
Where to Find More Information
• PwC, “Reshaping the Workforce with New Analytics” (Technology
Forecast, 2012).
www.pwc.com/us/en/technology-
forecast/2012/issue1/index.jhtml
• IDC’s December 2014 webcast on Big Data and Analytics
Predictions for 2015
www.idc.com/getdoc.jsp?containerId=prUS25329114
• The Supply Chain Council/APICS (and the SCOR Model)
www.apics.org/sites/apics-supply-chain-
council/frameworks/scor
• SAP Supply Chain Performance Management (SCPM)
www54.sap.com/lob/scm.html
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7 Key Points to Take Home
• Invest time and effort to develop a well thought out reporting
strategy; focus on scenarios
• Understand the breadth and complexity of the underlying source
data and corresponding systems
• Recognize and account for the needs of different types of users –
may require a different UI, mobile, etc.
• “Don’t give users fish,” but rather, “teach users to fish for
themselves”
• Test your reporting strategy before a full deployment – crawl,
walk, run. Look at specific scenarios, BUs, Geos, etc.
• Invest in your differentiators; leverage what you can
• If your reporting strategy takes longer than 3 months to deploy,
re-examine it
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Your Turn!
How to contact me:
Todd R Smith
Please remember to complete your session evaluation
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