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SAP FORUM İSTANBUL 2014SAP Transportation Management:
Bussines vs IT driven ChangeDr. Osman Bayraktar / Chris Schwab
Novigo
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 2
Purpose
Experience & Challenges with SAP TM Implementation projects
SAP TM Implementation: A benefits driven approach
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 5
Who is Novigo - Background
Enterprise Transformation Management
Monitor
& Realize Benefits
SAP Transportation Management
Continuous
improvement Process
Management Information System
& Business Analytics
Coach Beneficiary
Develop People & Leadership
Novigo formally known as GOPA IT
Consultants Inc.
- Focused on SAP SCM/TM since
2008 (first mover)
- Most SAP TM Engagements &
Implementations worldwide
- 100 % Track Record of successful
Projects
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 6
Who is Novigo
Enterprise Transformation Management
Evaluate & Examine
Current StateRedesign & Develop
Change Enabler
Monitor
& Realize Benefits
Business Readiness
Enable Organization & People
Communication
Stakeholder Management
Process Management
Continuous
improvement Process
Management Information System
& Business Analytics
Coach Beneficiary
Develop People & Leadership
Risk Management
Benefits Driven Business Case
Change Management / Leadership Development
Process Management / IT Consulting /
Project Management / Quality Management / Risk Management
Novigo
Best Practice
Approach
Why are we now Novigo?
- IT Systems Integrator to
a SAP Enterprise Transformation
Consultancy with a new
end-to-end Approach
- Global set up
- SAP TM talent pool
SAP Transportation Management
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 7
Locations & Regional Coverage
San Francisco Madrid
Walldorf
Bangalore
MiamiIstanbul
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 8
Engagements for SAP TM Demos, POCs & Implementations
Hig
h
Te
ch
LS
PO
il &
G
as,
En
erg
y
Ch
em
ica
lC
P /
Fo
od
Oth
er
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 11
IT vs. Business driven change
Business IT ApplicationC H A N G E
IT or business driven change rarely occurs in isolation of other
components of an organization
Idea. Lets get on
with this: It is time
critical
This is leading
edge IT
Solution: We
need it
.
.
.
.
.
.
.
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 12
Designing program architecture
IT Application
.
.
.
.
.
.
.
Infrastructure
.
.
What facilities are
required to
support the
change?
This is leading
edge IT
Solution: We
need it
IT or business driven change rarely occurs in isolation of other
components of an organization
Business
Idea. Lets get on
with this: It is time
critical
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 13
Designing program architecture
IT Application
.
.
.
.
.
.
.
Business Benefits
.
.
.
.
.
Infrastructure
.
.
What facilities are
required to
support the
change?
What are the
precise benefits
we are seeking?
This is leading
edge IT
Solution: We
need it
IT or business driven change rarely occurs in isolation of other
components of an organization
Business
Idea. Lets get on
with this: It is time
critical
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 14
Designing program architecture
IT Application
.
.
.
.
.
.
.
Business Benefits
.
.
.
.
.
Process
.
.
.
.
.
.
Infrastructure
.
.
What facilities are
required to
support the
change?
What are the
precise benefits
we are seeking?
Which parts of
the organization
will be involved
in delivering the
benefits?
This is leading
edge IT
Solution: We
need it
IT or business driven change rarely occurs in isolation of other
components of an organization
Business
Idea. Lets get on
with this: It is time
critical
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 15
Program architecture
IT Application
.
.
.
.
Business Benefits Process Projects
.
.
.
.
.
Infrastructure
.
.
What facilities are
required to
support the
change?
What are the
precise benefits
we are seeking?
What are the
required
projects to
improve the
process?
Which parts of
the organization
will be involved
in delivering the
benefits?
This is leading
edge IT
Solution: We
need it
IT or business driven change rarely occurs in isolation of other
components of an organization
Business
Idea. Lets get on
with this: It is time
critical
*Based on concept from Cranfield University
.
.
.
.
.
.
.
.
.
.
.
.
.
.
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 16
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Business benefits foundation for business case
IT ApplicationBusiness Benefits Process Projects Infrastructure
What facilities are
required to
support the
change?
What are the
precise benefits
we are seeking?
What are the
required
projects to
improve the
process?
Which parts of
the organization
will be involved
in delivering the
benefits?
This is leading
edge IT
Solution: We
need it
Business
Idea. Lets get on
with this: It is time
critical
Risk
Dependency
Cost benefit calculation
Organisational implications
Resource requirements
Owner
Stakeholder issues
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 17
Benefits driven program architecture
System Environment
SAP Implemented
Process
quantified benefits
future state Changecurrent state
Transport processes are
not connected across BU
Diverse IT system with
Different data models
Reporting & Analytics:
No standard KPI, disparate
data source
Increase X-BU
collaboration
Harmonies IT landscape
Role based KPI
Reduce manual
workload
Improve resource
utilization
Lower TCO in IT
Increase process
standardization
Transparency over SCE
Inbound freight
Reporting & Analytics
Vendor Portal
Managing transportation
requirements
Rate & Contract
Management
Planning freights &
Selection carriers
Freight payment
Track and trace
SAP ECC EHP
7
PI
TM 9.1
Model Client:
Lack of visibility
(Inbound)
Lack of economies of scale:
Freight rates
Monitor SCE
Improve negotiation
power
Lower freight rates
KPI based decision
making
Outbound freight
Transportation planning
GEO coding
SAP BW
EM
Organization/Process
Management
People
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 18
TM Components and Processes
OM - Order Management/Integration
PL - Planning
CS – Carrier Selection
TEND – Tendering and Collaboration
FP – Freight Audit and Pay
EXEC - Execution and Printing
T&T – Track and Trace
REP - Reporting
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 19
Quantitative Benefits (Project Example)
Common Issues in Transportation (Quantitative)
Freight
Spent
Model selection is not optimized Mode shift opportunities are not identified
Carrier selection is not optimizedAllocation and Business Shared are not
integrated
Rate and Pricing model are not optimal Difficulty to maintain consistent freight rates
Asset
Utilization
Last minute cancelled ordersNo Change Control Process to handle order
changes
Lack of visibility to combine loads Lack of interactive user interface in Planning
Product is not ready to loadOrder integration needs to be combined with
Delivery integration
Inaccurate product volume calculationLegacy system has its own set of material
characteristics
Outdated Legacy
Systems
Custom Interface is required Interface needs update to work with ECC
Legacy system usually not future proofSystem lacks innovation and continuous
improvement.
On-time
Performance
Operating hours are not consideredOperating hours are not maintained or being
used as a constraint during planning
Delivery windows are not consideredDelivery windows are not maintained or being
used as a constraint during planning
Headcount in
Logistics Area
Reduction of Paper based process Automate handling of Order Changes
Exception based transportation planning Bring Routing Guide online
OM - Order Management/Integration
PL - Planning
CS – Carrier Selection
TEND – Tendering and Collaboration
FP – Freight Audit and Pay
EXEC - Execution and Printing
T&T – Track and Trace
REP - Reporting
PL
CS
TEND
T&TFP EXE
C
CS
OM PL
PL
OM PL
OM RE
P
OM
RE
PTENDPLOM CS
FP
PL
PLOM
PLOM TENDCS
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 20
Qualitative Benefits – (Project Example)
Common Issues in Transportation (Qualitative)
Customer
Service
Customers are somehow restricted to order changes
No Change Control Process to handle order changes
Expedite Service not available Order Integration and Automation in Planning
are not optimal.
Early or late deliveriesOperation hours and delivery windows are not
respected
Carrier
Relationship
Fail to meet the committed capacitySystem does not support carrier allocation to
capture the consumed capacity
Limited communication to phone or fax System does not support the modern technology
such as EDI, XML, SMS
Carrier shows up with no shipmentProduct is not available / Last minute cancelled
orders / Not-executable shipments
“Offline” processing
(Spreadsheet)
Shipment Routing could be labor intensive and error prone.
Routing guides are maintained in Excel
Manual and Slow carrier selection based on email communication
Automatic carrier selection/tendering with allocation integration is not available
Data
Redundancy
Master Data (Customer, material) maintained separately in ERP and Legacy system
Transactional Data (Deliveries, shipments) maintained separately in ERP and Legacy system
Visibility in Transportation
ProcessesNo visibility once the shipment left the facility
Lack of tracking tool (e.g. EM) to capture transportation events.
OM - Order Management/Integration
PL - Planning
CS – Carrier Selection
TEND – Tendering and Collaboration
FP – Freight Audit and Pay
EXEC - Execution and Printing
T&T – Track and Trace
REP - Reporting
PL
PL
PL
PL
PL
PL
OM
OM
OM
OM
OM
CS
CS
TEN
D
TEN
D
T&T
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 21
Key take aways
IT or business driven change rarely occurs in isolation of other components of
an organization
High quality business cases: complete, realistic, and accurate
Better engagement with the business: communication and empathy
From project delivery to benefits realization: No “surprises”
© 2014 SAP AG or an SAP affiliate company. All rights reserved.
Teşekkürler
İletişim Bilgileri:
Dr. Osman Bayraktar
Vice President
Global Head of Enterprise Transformation & Management Consulting
O: + 1 (650) 249 3206 - M: +1 (650) 576 6030 - F: +1 (650) 521 5633
[email protected]; www.novigo.com
Novigo - 247 N. San Mateo Drive - San Mateo, CA 94401 – USA
Chris Schwab
Principal Consultant
SAP SCM
M: +49 (0) 160 96931695
[email protected] - www.novigo.com
Novigo GmbH - Altrottstr. 31 - 69190 Walldorf – Germany