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2020 Predictions For Procurement, Supply Chain, Business, And More

January 16, 2020 SAP

As we turn the corner to a new decade, businesses are looking for ways to address ever-increasing customer expectations: high-quality products and services delivered on demand, without negative impact on the environment or society — and at a reasonable cost.

We asked our global leaders for their perspectives on what to watch for in 2020. Here is what they had to say.

Data moves from an analytical to a decision-making tool

Mike Eberhard, president of SAP Intelligent Spend Group: “In 2020, the shift to leveraging data for real-time decision-making will accelerate for a growing number of business functions.

“For example, through intelligent platforms and network ecosystems, companies will access more and more data sets to shed light on such things as a potential supplier’s financial capability to fulfill a contract. Data can also be used to make budgetary decisions informed by the current status of each and every area of a company’s spending. Organizations possess, and can access, much or all of this data today – with the right tools.

“With an increasing number of data-points uncovered by Internet of Things (IoT) and machine learning, there is more information than ever before to help drive results. This allows organizations to make better sense of what’s happening, what’s coming, and, ultimately, make more intelligent decisions. In the coming year, many more organizations will start to realize the potential of their data to intelligently guide business decisions and leverage it to reach even greater levels of success.

“Looking even further into the future, they will eventually be able to determine whether potential suppliers’ policies adhere to international laws and social ethics, and be able to use data to identify, in advance, a host of potential supply chain disruptions, such as a small number of suppliers concentrated in a region vulnerable to weather or man-made disasters.”

Businesses embrace sustainable procurement

Pat McCarthy, senior vice president and general manager of SAP Ariba and SAP Fieldglass: “We’re entering a ‘greener’ decade spurred by people worldwide demanding innovative solutions to a changing climate, and a year that will feature a resolution to Brexit in Europe and ongoing trade negotiations between East and West. Addressing these and other challenges, including the global movement to end forced labor in supply chains, enterprises are seeking to align their brand values with those of like-minded trading partners.

“As we enter 2020, we can expect to see an uptick in adoption of intelligent spend management solutions as enterprises increasingly reap their benefits – operationally, reputationally, and sustainably. The best solutions, both for the procurement of direct and indirect goods and for external workforce management, guide users through an intuitive process, and leveraging third-party content, prompt them about any upcoming issues or challenges so they can make better-informed decisions. Meanwhile, these insights also enable enterprises to procure with purpose.

“These opportunities, made possible by cloud-based digital networks, are extending competitive advantages and fueling sustainable procurement at a scale never previously imagined – a phenomenon that is only gathering pace as we head into the new year.”

Adaptability and flexibility key

James Lee, chief operating officer of SAP Ariba and SAP Fieldglass: “In times of economic uncertainty, it becomes even more important for businesses to focus on cost-efficiency, compliance, and working capital management.

“To prepare for this uncertainty, in 2020, more organizations will think more strategically about how they spend business cash – investing in better spend management strategies that not only cut costs but also create new revenue-driving opportunities to grow and quickly scale. Adaptability and flexibility will be key to recession-proofing, so procurement leaders will need to embrace technologies that can integrate with intelligent technologies and analytics to improve decision-making, speed, and efficiency.”

A new normal for how work gets done

Arun Srinivasan, general manager of SAP Fieldglass: “With digital disruption reshaping industries and unemployment at record lows, talent is, and will continue to be in the coming decade, in short supply. Many of the skills companies need to compete today aren’t available in the traditional workforce market. The composition of the workforce has forever changed. There is an increased reliance on the external workforce, which comprises contingent workers – think independent contractors, freelancers, and temporary labor – and services providers such as consulting firms, IT outsourcers, and marketing agencies.

“To get work done, organizations will increasingly look beyond their traditional employee populations and turn to the external workforce for the skills needed to thrive in the digital economy. These are skills needed not just to keep up with the pace of change today but also to drive innovation around artificial intelligence, machine learning, data science, process automation, robotics, and more.

“Looking ahead to 2020, expect to see greater engagement of the external workforce as a significant source of competitive advantage. The winners of the war for talent will be the companies paying attention to the demands and desires of all workers – internal and external.”

Profound shift for procurement

Darren Koch, chief product officer at SAP Ariba: “As a new decade approaches, businesses large and small are seeing an increasingly clear connection between embracing intelligent spend management – an approach that brings together every source of spend and buying channels and draws upon vast reservoirs of operational data to manage risk, yield, contextual insights, and fund innovation through savings – extending competitive advantage.

“Where is intelligent spend management headed in 2020 and beyond? Toward systems that can carry out end-to-end procurement processes for all types of spend within parameters strategically set and overseen by humans. In the coming years, we can expect to see intelligent technologies give rise to autonomous functionality, with cloud-based, artificial intelligence (AI)-enabled applications revealing detailed insights, providing prescriptive recommendations, and unshackling talented procurement professionals from the tedium of low-value administrivia. I believe that, in time, autonomous functionality will represent a profound shift for procurement in much the same sense that autonomous vehicles do for transportation.”

Purpose in procurement drives environmental, social, business impacts

Padmini Ranganathan, global vice president of Risk and Sustainability at SAP Ariba: “There has been a general awareness of environmental and societal issues for decades, but now we are seeing a sense of urgency and demand for real change – propelled by easy-to-share information, compliance requirements, and growing demand for transparency. Consumers will vote with their dollars, and because of this, companies are leveraging their impact on issues such as climate impact, forced labor, and impact on livelihood and job opportunities as a part of their brand promises.

“To be credible, the smart ones will shift from focusing just on cost savings and compliance to true value creation and avoid greenwashing. Squeezing suppliers on cost just doesn’t cut it anymore. Buyers and suppliers are coming together to create value for their mutual customer – and where else can this happen but from the beginning of the procurement process when sellers come calling with their business cards or buyers scan the globe for the best suppliers? In 2020, watch for more and more businesses to focus on developing transparent, sustainable relationships that have positive impacts on both the environment and society.”

Partnerships bring more value in 2020

Sean Thompson, senior vice president of Business Network and Ecosystems at SAP Ariba and SAP Fieldglass: “With the rapid rate of technological change and disruption in the marketplace, 2020 will see partners moving beyond the traditional role of strategic advisor to that of business collaborator and innovator. This collaboration will increase the diversity of business networks and allow companies to take advantage of open APIs to solve critical business challenges. Ultimately, the name of the game is co-opetition, where partnerships allow for doing more for customers together than alone.

“We’re also going to see greater efficiency and ease across networks and network-to-network collaboration. All business is global, and companies with varied and diverse supply chains need to rely on clear and concise information to make real-time business decisions across borders and geographies. Data-driven insights will allow buyers and suppliers to think differently about how they source or sell. A continued focus on compliance and reduction in supply chain risk will demand simple, clean, and transparent procurement solutions. The impact will be significant, driving innovation as never seen before.”

Artificial intelligence fully integrated into supplier management

Drew Hofler, vice president of Portfolio Marketing at SAP Ariba and SAP Fieldglass: “In 2020, businesses will extend and accelerate output of existing intelligent technologies, such as AI, by applying them to different business operations and integrating them with one another. The supply chain is a great example of this. For instance, AI will disrupt the manual, error-prone process of managing vendor contracts by automating the process and applying intelligent algorithms. And, AI will be integrated fully into the supplier management process, helping identify high-risk suppliers before purchases are made to ensure suppliers are financially, environmentally, and ethically sustainable.”

Businesses adopt a value-driven approach to procurement

James Marland, global vice president for the SAP Center of Excellence for Spend Management at SAP Ariba and SAP Fieldglass: “In 2020, businesses will start to seriously take account of the ethics and values of their customers to drive procurement decisions. As issues such as sustainability, diversity, and working conditions increasingly displace price in the buying decision, businesses will need to adopt a values-driven approach to spend management to ultimately address them. It’s an exciting time to be in procurement – breaking out of the back office and getting to the front lines.

“One example of where businesses will look to make a tangible difference is with plastics. Redirecting even a small portion of global spend on packaging to precertified suppliers of recycled plastics and alternatives can have a tremendous impact. These suppliers can then grow, reaping benefits from economies of scale, and then start to lower the costs of their products. Ultimately, this practice will make sustainable materials more widely available and economical for buyers. In the next year, inspired by their customers, businesses will leverage spend management and business networks to make a dent in these intractable issues.”

This article originally appeared on SAP News Center and is republished by permission.

Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | Facebook | YouTube

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Top 5 Challenges Automotive Industry Will Face In The 2020s

January 15, 2020 SAP

At a glance, it may seem that the automotive industry is going strong and has nothing to worry about. In the United States, it serves as the most significant component of retail sales (about 20% of the total). It contributes almost 3% to the gross domestic product and employs nearly 18 million people.

However, under the surface, things are not as optimistic: The entire industry already faces some very serious challenges, which will play an even more significant role over the next decade. The very fact that the industry is such a big contributor to the economy means that anything that happens to it will have a major impact on the world as a whole.

So what are these challenges? Let us take a closer look.

1. Environmentalist pressure and fuel dependence

For a long time, the automotive industry has been caught between a rock and a hard place; or, more specifically, between customers’ demands and the pressure from environmentalists and governmental regulations. As transportation is responsible for about 30% of CO<sub<2 emissions in the European Union, car manufacturers are forced to continuously work to decrease CO₂ emissions from their new models, which in turn increases their price and decreases their performance and safety (because the most common approach to meeting new requirements is lowering the car’s weight, which means using lighter and flimsier materials). This makes production of vehicles using fossil fuels an increasingly expensive and unpromising venue, especially when combined with the general instability of the oil market (a recent attack on a Saudi oil plant shows how a single event can disrupt it for months).

2. Rise of car sharing

The automotive industry has to take into account the general trend against individual car ownership. This no longer concerns just the people who travel by air and hire a car to move around in a new city at their leisure. New rental services are different because they are primarily used by locals – people only who rent cars for short periods of time when they need them. This means that people are buying fewer cars, and the total number of cars will still be less than if every individual owns a vehicle. This trend is likely to grow more important in the coming years, and the automotive industry has to find ways of staying profitable in spite of it.

3. Electric vehicles

As electric vehicles produce over 50% less CO₂ emissions than average gas-powered vehicles, governments and environmentalists strongly promote them. This means that car manufacturers need to invest in developing this technology if they want to stay in business once the stranglehold of CO₂ regulations tightens around their necks. The companies that can’t produce solutions that are cheap and efficient enough are likely to go out of business.

4. Chinese market

For a long time, the Chinese automotive market has been the most profitable in the world. Dealing with it was risky, but staying away was riskier still – any car manufacturer that ignores China loses share in a rapidly growing and extremely promising market. The situation remains more or less the same now, with allowance for the changing economic situation. The rapid growth that often disrupted any initial plans was replaced by slower growth, an extremely fragmented market, savage competition, more restrictions related to air pollution and traffic congestion, and the emergence of the used car market.

5. Smart, connected, and self-driving vehicles

The emergence of the Internet of Things and AI in vehicles may change the car industry forever. Cars that drive and interact with each other without human participation will completely change the way people travel, It won’t happen overnight but, once it starts, it will not stop until this model completely replaces the old paradigm. So far, multiple car manufacturers are making inroads into this realm but progress is relatively slow, and none of them have advanced far enough to completely ensure the safety of everyone on the road. The company that first achieves this will have the chance to become the dominant force in the car market for decades to come – which means that all leading manufacturers have to invest huge amounts of resources into this project if they want to remain relevant in the future.

The automotive industry’s challenges lie in both the technological and economic spheres, and there are no clear-cut ways of overcoming them. It remains to be seen how manufacturers will deal with them, and if these changes will lead to a radical restructuring of the market.

Learn How Automotive Companies Are Turning Disruption Into Opportunity In Product Development.

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How To Choose The Best Idea After A Good Brainstorming Session

January 11, 2020 SAP

Everyone has situations where you have to come up with a set of ideas that will solve a specific problem. The question becomes how to decide which ideas to pick from all the ones you come up with.

Great innovations result from picking good ideas, making them better, and bringing them alive. While most teams can come up with interesting ideas for innovation, the biggest hurdle is ensuring that the right ideas are selected to develop, test, and launch.

We need some sort of framework that will allow us to decide the value of each idea so we can pick one that is most valuable.

EPIC framework

One such framework was suggested by Todd Henry on an episode of his Accidental Creative podcast. On a side note, if you are a creative professional or you lead a team of creative professionals, you need to follow Todd Henry. He has written multiple books and hosts multiple podcasts, all focused on the needs of creative professionals.

Now back to the question at hand. In this episode, Todd shares information about the EPIC framework that you can use to pick the best idea among all the options. EPIC is an acronym that stands for Effective, Practical, Interesting, and Cool. Each idea is rated on a scale (1-10) on the following questions:

How effective is this idea in solving the problem that we are trying to solve?

How practical is the idea based on the constraints that we are operating under?

How interesting and cool is the idea?

How much energy does the team have for the idea?

Once you rate each idea on these questions, you can pick the one that consistently scores the highest on all. If there is not a clear winner, you can start looking at the ideas (I believe that effectiveness is non-negotiable) and take interesting and cool ideas and that are effective and make them practical.

DFV framework

Another framework that I usually advocate is the Desirability, Viability, and Feasibility framework.

Create a Venn diagram like the one below. Pick each idea and decide with the team which section the idea falls into in the Venn diagram. You can do this by first discussing the idea together and then deciding together (either through voting or scoring) where in the spectrum the idea falls.

How To Choose The Best Idea After A Good Brainstorming Session — desirability viability and feasibility framework

Once this is complete, hopefully, you have some ideas in the center of the Venn diagram, ideas that are desirable, viable, and feasible. If more than one idea falls into this space, I recommend the team pick the idea that is the most desirable to start working on.

If none of the ideas are at the center of the Venn diagram, I recommend that you start looking at the ideas in the desirable + feasible intersection and explore how can they be made viable, or pick the ideas in the desirable + viable intersection and explore how can they be made feasible (in that order).

The desirability of the idea is the most critical factor, in my experience, but however good an idea is, if it is not desirable, it either won’t see the light of the day or will have challenges in adoption post-implementation. So, my recommendation is to always start with ideas that are desirable and work towards making them viable or feasible.

In conclusion

These are a couple of frameworks that I think work really well. You can find many other frameworks for picking the best ideas. You can decide to use multi-voting or a decision matrix analysis or a paired comparison analysis or even a simple 2×2 matrix around effort and impact.

What matters is not which framework you use but that you use a framework and that the framework is decided before the actual brainstorming, so that everyone knows how the best ideas will be picked after the brainstorming session.

A version of this post first appeared on the blog Musings of a Salesman and has been republished here with the author’s permission.

Learn how scenario integration is transformed into an automated workflow on January 23rd.

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Digitalist Magazine’s Top Posts Of The Week [January 6, 2020]

January 7, 2020 SAP

Digitalist Magazine’s Top Posts Of The Week [January 6, 2020]

Shelly Dutton

Digitalist Magazine, online edition, covers a variety of topics around the challenges businesses face in the digital economy. Whether you’re interested in the future of work, customer experience, digital economy, the Internet of Things, or digital supply networks, we provide a vast array of thought leadership and real-life stories on the practical application of digital technology.

Each week on Digitalist Magazine, we publish a list of the top posts of the week from across our content categories. We hope you find these articles valuable, informative, and interesting.

Customer Experience Strategy And Overall Company Strategy

Building The Business Case For Blockchain

Unlocking The Data Promise: Data-To-Outcome Challenges (Part 2)

The Secret To Winning In A Rising Golden Age For Midsize Businesses

Five Marketing Technologies Transforming The Hotel Business

Red Thread Transformation: Building Blocks Of Connected Transformation (Part 2)

Customer Loyalty From The Lens Of CXM

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Customer Experience Strategy And Overall Company Strategy

January 3, 2020 SAP

The generic company strategies model developed by Michael Porter classifies companies into one of three broad, generic categories: cost leaders (competing on low prices), differentiators (competing based on innovation in their products/services), and segments (competing by focusing on specific market needs) (Philipson, 1992).

A customer experience strategy is defined as “a plan that guides activities and [the] resource allocation needed to deliver an experience that meets or exceeds customer expectations.” There are also three customer experience strategies that align with the generic company strategies: self-service optimization, proactive guidance, and tailored intimacy (Forrester, 2010).

The following diagrams depict how the three customer experience strategies align with the three generic company strategies.

The self-service optimization strategy

The objective of the self-service optimization strategy is to create extremely effective high-touch self-service that is simple, automated, and error-free. Here are some examples of how this objective has been implemented:

The proactive guidance strategy

The objective of the proactive guidance strategy is to ensure customer delight by educating on innovations, solving problems preemptively, and connecting through social media. Here are some examples of how this objective has been implemented:

The “tailored intimacy” strategy

The objective of the tailored intimacy strategy is to use knowledge of target customers to create deep connections through interactions that are attuned, empathetic, and personalized to clients’ needs and aspirations. Here are some examples of how this objective has been implemented:

By focusing on aligning the generic company strategy with the customer experience strategy, it is then necessary to align the customer experience ecosystem to this strategy.

Learn how to choose the right digital experience platform for your business by watching the on-demand SAP Webinar featuring Forrester, “Customer Experience Matters.”

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Red Thread Transformation: Building Blocks Of Connected Transformation (Part 2)

January 2, 2020 SAP

Part 2 in a 2-part series about the importance of devising a structured and referenceable digital transformation strategy. Read Part 1.

In Part 1 of this series, we addressed the idea of “looking through the right lens” for transformation by moving to an intelligent ERP system. Now, let’s now unpack what needs to be thought through and understand how each of these layers helps connect a logical and rational approach to transformation: “Why do you need to do what?” “What can you achieve?” and “How can you make it happen?”

Threaded thinking

Ambition: Why do you need to do what? Companies typically believe in the value of strategic and vision planning, and these are often deconstructed into corporate and departmental strategies, roadmaps, plans, and programs that can be referenced to create a lighthouse articulation of where the business wants to go.

Business capability modeling enables a clear articulation of the business ambition: what capabilities are needed to support the strategic intent. Once constructed and agreed upon with the business, this is the framework to help position the potential “pains and gains” in relation to capabilities.

Organizations need to know where they are going and for everyone to understand how to plot a way forward and measure success. This intent should be then further elaborated with experts from the solution provider in focused sessions sharing real experience from other customers on how to achieve this.

These sessions identify the pain points that can be alleviated and the gains to be achieved, informed by the “art of the possible” into a consolidated view from which to create tangible business value.

Value: What can you achieve? At the heart of any successful business-change program is a true understanding of the opportunities and challenges. This is where the light bulbs start switching on and the program starts coalescing.

Business and IT must engage in content sessions with experienced consultants and architects to detail how to close the gaps in current business capabilities to resolve the pains and make the gains. At this point, the business innovation opportunities are explored in light of the solution provider’s product and innovation roadmap for priority areas of the business capability model.

In these sessions, a common understanding is defined on the opportunity and the solution though the explanation of strategic gaps, pains and gains, and demonstration of product capabilities and innovations, product roadmaps, and pragmatic customer experience.

Essentially, this helps share an understand of the challenges and the potential solutions to establish solution fit, and get buy-in by demonstrating the business value in a more hands-on way. Furthermore, it establishes confidence in the ability to deliver business value.

It’s then a classic process of defining opportunities, validating performance through benchmarking, and articulating the value potential. “Must-haves,” “quick wins,” low- hanging fruit,” and “forget it’s” are prioritized into a set of focused opportunities.

Direction: How can you make it happen? Up to now, the focus has been on a forward-thinking view of business potential, prioritizing value. The challenge now is to design a successful transformation program to achieve this potential. This is where ideation hits the reality of how to make it happen.

A straw-man future solution model can then be built embedding all the capabilities into an architecture showing how the strategic intent is delivered by business capabilities, and what application services will be employed.

Early-stage opportunity potential will be identified that needs further evaluation as proofs of concept or co-innovation with product teams. Roadmaps will be developed for each function area, describing the business opportunities aligned to the core product roadmap to secure a future-proofed functional roadmap, taking advantage of the standard product. This then needs to have been consolidated into a single roadmap to show how the business can deliver future business capabilities in an integrated platform.

The challenge now remains to plot dependencies around the business priorities, other programs, product roadmap, and technical dependencies. A review of implementation approach options, pros, and cons will then help define the best implementation approach. The outcome is then a firm and trustworthy transformation roadmap and plan as the foundation for a business case.

The final step is to summarize this work into a case for change and to make recommendations to the board with a robust business case and proposition. This will make clear how the proposed plan supports the strategic business intent, the true business value potential, the cost of viable options and plans to secure the investment, and the recommendations for immediate plans and resources needed to make this a reality.

Conclusion

It is essential that business challenges and digital changes be guided by a clear line of sight of a thread connecting business ambition, the value, and a carefully thought-out navigation of the direction to get there.

By investing in this structured process, the transformation program is informed, clear, and purposeful. It will demonstrate the benefits of a tightly oriented team that can efficiently deliver its business outcomes.

Why look to SAP for help

In collaboration with the business, IT, and partners, SAP Digital Business Services can provide the glue to help your organization navigate across this “red thread” to articulate how technology solutions in the hands of an empowered workforce can deliver on strategic goals. SAP consultants and architects connect via their own networks to engage SAP product owners and developers in this dialogue. They also advise on using the latest agile accelerators, tools, and methods to design, implement, and support these solutions most effectively.

Discover how SAP S/4HANA can help you transform your business for dramatic results.

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Digitalist Magazine’s Top Posts Of The Week [December 30, 2019]

December 31, 2019 SAP

Digitalist Magazine’s Top Posts Of The Week [December 30, 2019]

Shelly Dutton

Each week on Digitalist Magazine, we publish a list of the top posts of the week from across our content categories. We hope you find these articles valuable, informative, and interesting.

Five Marketing Automating Techniques To Achieve Jaw-Dropping Audience Engagement

IoT-Enabled Transformation For Tangible Business Value

Growing Importance Of Customer Experience Management

Entrepreneurs: Use These Five Strategies To Reduce Your Risk Of Bankruptcy

Spares Pooling: Machine Learning To The Rescue

Is Experience Management Exclusive To Consumers?

Red Thread Transformation: Looking Through The Right Lens (Part 1)

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Spares Pooling: Machine Learning To The Rescue

December 28, 2019 SAP

Spare parts. Every original equipment manufacturer (OEM) has to maintain an inventory of them. Machines break, pieces of equipment fail, and customers need spares to make repairs without delay.

In today’s on-demand global market, spares replenishment must work like magic: prompt, cost-effective, and seamless. Otherwise, prolonged downtime due to equipment failure can have serious direct and indirect impacts, for example, dysfunctional surgery suites in hospitals, flight cancellations, production delays, unfulfilled orders, or poor quality leading to product recalls.

Ensuring the right parts are on hand when needed

Having a sufficient and efficient supply of spare parts is a vexing inventory-management scenario. Forecasting parts-failures at the points of demand and planning for replenishment are essential, as parts are very expensive and costly to keep in stock. Meanwhile, warehouse management teams must routinely juggle multiple, complex scenarios with contradictory insights, forecast failures, and inventory based on complicated predictive analytics.

Demand and consumption forecasting is done at the stockkeeping unit (SKU) level by taking into account the way they handle failures in KPIs. Doing so can minimize the costs of downtime. The key is to apply a risk-ranking system estimates the consequences of a failure to the business, the probability that a failure will occur, and the risk the business is willing to accept.

In terms of a repair strategy, a lot depends on the OEM’s policy on parts replaceability versis repairability. Availability of onsite skills within the maintenance team and time to repair are crucial factors in these decisions. Sometimes, it is more cost-effective to replace the unit and to repair the old unit at one location. But stocking whole units is far more expensive than individual SKUs.

Calculating the efficient safety stock levels at the SKU level must take into account the predictability of demand, delivery lead times, delivery accuracy, obsolescence, transportation costs, and more. The strategy must include reorder points (ROP) and reorder quantities (ROQ), as well as cost-based optimization of order quantities and order cycles at the supplier or product level. Combining automated routine orders with order suggestions for specific important items as well as automatic exception management must also be considered.

Pooling dramatically changes the stocking strategy

Most OEMs have multiple warehouses with millions of dollars’ worth of inventory. If they were to stock at least one piece of each part in all these warehouses, the cost would be prohibitive. This is where parts pooling comes in.

Pooling builds on data that proves aggregation reduces variability and uncertainty. This implies that demand variability will decrease by aggregating spares across locations.

For example, low demand from one warehouse location offsets the demand at another warehouse location. This decline in variability allows a reduction in safety stock and reduces average inventory. When executed well, it is an excellent approach to reduce inventory at individual warehouses without impacting customers.

Shared and pooled warehousing have the potential to transform spares management of small and midsize businesses in competitive markets. This is quite valuable as business networking strategies and collaboration in logistics continue to gain momentum.

Easier said than done

Location-base parts pooling requires adding many highly complicated variables to the current set of variables. In this case, predictive modeling is no longer sufficient. It is time to move to artificial intelligence (AI) and machine learning models that take into account multiple variables and blend them to enable better decision-making in two critical areas:

Warehouse location and product flow: Decisions on whether to have many warehouses close to customers or to have more centralized locations can balance the advantages of aggregated demand and lead times. Proximity to customers and other factors may make maintaining more warehouses more advantageous.

Transportation: Managing parts pooling across locations means accounting for the geographical area along with logistics like availability and reliability of the ground transportation network, flights, or water corridors.

Within months of implementing warehouse pooling optimized through machine learning, most OEMs’ customer KPIs improve while simultaneously minimizing the capital invested in spares.

AI and machine learning models merge cost, operations, and criticality analysis for the relevant scenarios while factoring location criteria at a granular level to automate actions and enable better decisions. Optimization enable OEMs to reduce inventory without impacting customers by using a pooling model.

To reduce risk, OEMs can start by implementing an ML model with a few fixed locations and fewer optimization criteria, like the cost of parts, shipping costs, lead times, and the probability of failures. As the system matures, they can improve this model through a dynamic pooling model capable of handling more factors.

Lenient spares inventory management is a strict no-no as the costs of non-availability can be disastrous. Machine learning-enabled systems are set to transform the way warehouses operate. But before OEMs take the plunge, they must make sure they have the data and talent they need.

See some real-world examples of how machine learning is establishing itself as a mainstream technology tool for companies, enabling them to improve productivity, planning, and ultimately, profits, in the study “Machine Learning In The Real World.”

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Digitalist Magazine’s Top Posts Of The Week [December 23, 2019]

December 25, 2019 SAP

Digitalist Magazine’s Top Posts Of The Week [December 23, 2019]

Shelly Dutton

Each week on Digitalist Magazine, we publish a list of the top ten posts of the week from across our content categories. We hope you find these articles valuable, informative, and interesting.

Why Your Data Should Have Empathy

Becoming A Digital Enterprise: The Role Of The CFO

Top Work Trends For 2020 And Beyond

How Automation Is Changing Financial Services

AI Digital Document Transformation Increases Business-Critical Efficiencies

All You Need To Know About Master Data Governance

Towards 2020: Predictions For The Future Of Procurement

Human Experience Management (HXM): The Evolution Continues

The Digital Customer Experience And The Customer Journey (Part 2): Connecting Experiences

What Do Rock, Paper, Scissors Have To Do With A Successful Technology Solution?

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Satellite Imagery And ML For Vegetation Management For Utilities

December 20, 2019 SAP

Satellite Imagery And ML For Vegetation Management For Utilities

Bharti Maan

After remaining relatively unchanged for almost a century, utilities are adopting distributed automation as an answer to the economic challenges and significant quantitative and qualitative benefits in the areas of interruption and customer service, respectively.

Vegetation management has been a key issue for electric utilities, and it has largely remained a manual, contractor-driven process, with personnel on the field scouting (on the ground or by air) through the terrain and collecting data, securing permissions, and issuing work orders for clearance of vegetation encroachments. Using drones for surveys has also been helpful to an extent.

The combination of enterprise resource planning, satellite imagery, machine learning (ML), and artificial intelligence (AI) provide definitive answers to vegetation management challenges.

High-definition satellite imagery combined with multiple sensors can eliminate the laborious process of personnel on the field manually scouting through the terrain and collecting data.

ML/AI algorithms can process data to identify specific spots where vegetation might encroach or interrupt operations and help arboreal teams pinpoint specific spots for trimming or removing vegetation.

Dashboards can spot alerts raised by the algorithms.

Simultaneously using tree species’ inventory and weather data can further optimize systems.

Integrated ERP solutions can enable further automation for engaging contractors by planning and scheduling work orders and tracking execution updates within parameters set by the budget.

ERP solutions can be combined with mobile field solutions to enable field teams to capture details during vegetation trimming.

With the help of ML/AL, satellite imagery, ERP, and mobile solutions, the next new normal is fast approaching how utilities manage vegetation.

Learn what the energy sector is doing to become one of the Three Industries Where Technology Is Reducing Our Carbon Footprint.

About Bharti Maan

Bharti is the director of Innovation and Digital Transformation Advisory at SAP, architecting and mentoring digital transformation projects for key and strategic accounts of SAP. She is a thought leader and technology champion for disruptive technologies of cloud, data analytics, digital twins, AI, IoT, cognitive intelligence, and RPA. Her team ensures alignment to business goals by defining appropriate strategies and ensuring that “the rubber meets the road.”

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Category Archives: SAP

Data moves from an analytical to a decision-making tool

Businesses embrace sustainable procurement

Adaptability and flexibility key

A new normal for how work gets done

Profound shift for procurement

Purpose in procurement drives environmental, social, business impacts

Partnerships bring more value in 2020

Artificial intelligence fully integrated into supplier management

Businesses adopt a value-driven approach to procurement

1. Environmentalist pressure and fuel dependence

2. Rise of car sharing

3. Electric vehicles

4. Chinese market

5. Smart, connected, and self-driving vehicles

EPIC framework

DFV framework

In conclusion

Digitalist Magazine’s Top Posts Of The Week [January 6, 2020]

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The self-service optimization strategy

The proactive guidance strategy

The “tailored intimacy” strategy

Threaded thinking

Conclusion

Why look to SAP for help

Digitalist Magazine’s Top Posts Of The Week [December 30, 2019]

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Ensuring the right parts are on hand when needed

Pooling dramatically changes the stocking strategy

Easier said than done

Digitalist Magazine’s Top Posts Of The Week [December 23, 2019]

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Satellite Imagery And ML For Vegetation Management For Utilities

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