ASUGFORWARD - customers speak candidly about the supply chain in 2020

Profile picture for user gonzodaddy By Den Howlett June 23, 2020
Summary:
How are supply chains holding up in the current crisis? In some cases remarkably well but there's plenty of pressure

ASUGFORWARD
(screenshot from event site)

In all the years that I physically attended SAPPHIRENow I can't recall attending many ASUG specific sessions. There was never enough time to give it the attention of other user group events.

This year, with all events going virtual, ASUG decided to do its own thing rather than co-host with SAP as it would normally. That's kinda risky because ASUG (rightly) views SAPPHIRENow as an opportunity to recruit new members. But I understand how ASUG saw the virtual alternative as a way to rethink the offering, opening it up to non-members. That is a smart move because it allows ASUG to showcase in ways that would be much more difficult in the physical world. 

As a staunch buyer advocate, ASUGFORWARD was always going to be an event into which I had to tune. In the run up to the event, Jon Reed and I spoke with Geoff Scott, CEO ASUG, noting that the virtual format is a great opportunity to get customers talking about real world problems. My only concern was how they'd pull off this event. We've seen many events in recent weeks that have been disappointing and I feared it could easily go wrong. I need not have worried.

ASUG chose the On24 method of delivery that scales well and allows for live interaction through polls, chat and Q&A. In the supply chain sessions, Thomas Wailgum acted as show host and did a great job keeping everyone to time while injecting a sense of fun.

There were some pre-recorded sessions but none of them felt forced or overly scripted. Instead, attendees were treated to examples that provided the opportunity to raise good questions and well deserved praise. If the remainder of the program lives up to what I saw on day one, then ASUG FORWARD will go down as one of the best of the Spring 2020 events season, well ahead of others so far. What did I learn? 

Four customer stories

First up was Marcello Damiani – Chief Digital and Operations Excellence Officer, Moderna, a biotech company that claims to be "the industry's leading mRNA technology platform, the infrastructure to accelerate drug discovery and early development." Unsurprisingly, it is one of many companies racing towards creating a COVID-19 vaccine. Damiani explained that while digital systems are essential the company has to balance those efforts against business realities. Asked what he would do if he had foresight on 1st January 2020. Damiani said: 

I'd accelerate the two year resource plan dramatically because you need systems and people resources to deliver.

Next customer up was Nat Miller, Senior Director, IT Business Solutions and Employee Benefits, US Sugar Corporation who talked about how the use of mobile technologies helped overcome limitations that would otherwise be problematic. The project, which is based on Neptune Software interacting with SAP systems started a few years back as a way of improving both productivity and user experience.

The specific problem centered around pre-kitting parts orders to ensure faster distribution. The original project worked well but was largely manual with much paper printing and passing of work orders around. Box location tracking was also a warehouse management pain point that incurred small but accumulating costs. Developing a mobile solution allowed US Sugar to solve a variety of problems while at the same time improving the process in a way that was readily adopted by users familiar with smartphones.

In the context of the pandemic, the solution allowed the the warehouse to minimize the impact of social distancing requirements as warehouse managers started to work remotely. 

Each person doing the kitting has their own handheld so they're not sharing and passing along paper or having to use a shared kiosk. 

Despite the crisis, US Sugar has an active program of further improvements in work order management and water usage in irrigated fields. 

Offline capability in Neptune is key to that future water tracking project. We have a lot of wifi coverage across our lands but there are dead spots. 

Lee Johnson – CIO, Tidewater Marine was next up talking about an SAP simplification project running on AWS. This is a firm that came out of a merger between Gulfmark and Tidewater. The enlarged company operates one of the largest OSV fleets supporting the hydrocarbon exploration industry. As part of the merger, Johnson was tasked to find $45 million in merger synergies. The project produced some impressive results. Johnson explains:

We had a very tight deadline of nine months in which to get this done. Tidewater was four times the size of Gulfmark so there was a lot of complexity to consider as we built a platform to achieve resilience, security and scalability. We had an agile and bold project plan that attacked 13 functional areas, eliminating 40 manual processes, put in 130 interfaces, deployed and/or enhanced 20 apps. We achieved 16 quick wins before go live. As a by-product, we had 100% of our onshore workforce teleworking during the crisis. We're probably around 85% in the cloud whereas prior to it was more like 10%. We now have a 24x7 support model. We now have 45TB of data in AWS, the financial close was reduced from 25 to five days. This past May we reduced to four and a half days. 

Most impressive though are the cost savings which came in at $65 million. 

I'm always fascinated by industries of which I have little knowledge and the session from Barrie Corp – Supply Chain Manager, Gainesville Regional Utilities (GRU) was especially illuminating. GRU is a community owned multi-utility provider, something of a rarity in the US where it acts like a utility aggregator providing gas, power, water, waste water and telecoms. Based in Florida, storm season preparation is especially important and starts in April. In a normal year preparations work something like this:

  • April 1st - Review material for storm restoration, confirm stocking requirements with key suppliers, update supplier emergency contact list
  • May 1st - Adjust ordering rules in SAP system
  • June 1st  - Storm season officially begins

As part of the process, response teams are reminded to check they have all their PPE requirements in place. This year GRUs planning was unsurprisingly impacted by COVID-19 but presaged by a squall line that hit early February. Corp says:

We started to see reports in the news about supply chains and that's almost unheard of outside the supply chain industry as most people don't even know what a supply chain is. That was a red flag. Then we found that supplies were drying up everywhere. 

Corp noted that supplies of essential materials were extended across every category with some exceptional problems like pole line hardware that is usually available within a few weeks going out months. Corp has also had to consider what to do about COVID specific supplies that GRU does not normally carry in inventory such as hand sanitizers where topics like end of life dates matter. 

The storm season is just getting underway and while GRU implies it is in reasonable shape, largely because essential systems have been given aid and priority, it is clear that those supply chains are in trouble with uncertainty ahead. 

Finally among the customers presenting, Jill Dunmyer – Procurement Manager, Martin-Baker, a manufacturer of ejector and crashworthy seats, provided us with a vivid explanation about how remediating her company's inventory handling allowed them to deal with what she termed 'alien stock.' This is inventory representing rarely or barely used items. Back in the day when I was in lighting manufacture, we called that 'crap stock.' The lesson here was straightforward - paying attention to Master Data and Planning Parameters quality makes a significant difference to optimized and so-so inventory management. 

My take

Customer stories are always the most compelling for me and this selection did not disappoint as they provided an insight into the state of supply chain among ASUG members.

It is perhaps indicative of where SAP customers are at that in a poll, 39.1% of respondents either didn't know or were unsure whether they have a supply chain project in place, while 19.1% don't have a project planned for the next 12 months.

In another poll, 42.9% have no AI-related project plan with 25.2% either having completed or starting AI-related supply chain projects in the next 12 months.

One interesting part of the conversation came at the end with Wailgum putting Akhilesh Mavilaveettil – IT Senior Director, Enterprise Solutions, Honeywell, Binoy James – SVP Operations, Protera and  Sandy Markin – Senior Director, Digital Supply Chain Solutions, SAP under the spotlight. Here are two takeaways:

A six month forecast during a pandemic is not very useful.

And one word to sum up the current situation?

Shift, Turbulence, Adapt.

Which of those applies to you?

Onwards to the next day's session...