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From Silos to Integration: How IBP is Transforming Supply Chain · Speaking of Supply Chain

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You're listening to Speaking of Supply Chain, a Mebach podcast. This is a
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show for logistics professionals looking to learn more about the latest innovations in supply chain.
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Each episode will feature a conversation on topics such as mitigating supply chain disruption
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and reducing risk, current automation trends, sustainability initiatives, and more. Let's
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dive right in. Hello, and welcome to Speaking of Supply Chain, where
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we explore trends, current events, and innovations impacting the supply chain and logistics
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industries. I'm your host, Ellen Wood. Today we've brought back Alex Waterlinks
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to join us, and we are also joined by Marcus Lee from Western Knocker,
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and we're going to have a discussion about IBP, or integrated business planning
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and a new tool from SAP, the cloud Data visualization. So welcome,
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gentlemen, Thank you so much for being on the show today. How are
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you? Thanks for having us, Yes, thanks for the invitation. Very
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interesting topic to talk about, right, it is it is. It's a
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very interesting topic. We are talking about integrated business planning. Now, I
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know that these terms have changed over the years. It was sales and operations
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planning, for a while SNOP. Now IBP has come in and gone out
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and come back in, and what is the term mean? What does it
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encompass at this point in time. I think that that's a very good question,
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right, because a lot of times when I talk to customers, it's
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exactly the dis question, right, Because usually IBP, as you say,
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integrated business Planning is the next step for SNOP, right, to bring Snop
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and Richard with the financial view and bringing the financial planning into the whole game.
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That's usually what we would call as a process IBP. Right. But
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unfortunately there is another product at SAP which is also called IBP, but actually
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it serves another purpose and that's often misunderstood. Yeah, a point of confusion.
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And indeed, I was going to say this when we really take seven
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steps back then, I think SAP was really getting onto the fourth Plan around
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the eighties. That was was it first invented. It really got its peak
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around the years two thousand and then it came into slumber, whereby a lot
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of companies had then even a second or third iteration of sp RE implementation.
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So obviously, as consultants as also people within the industry, we were looking
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for other concepts that transgressed beyond what was actually SNOP in principle, just a
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tool and a methodology to bring operations and sales together. And then the obvious
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next a partner or stakeholder on the table was then to integrate with operate with
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finance, to integrate with controlling, etc. So therefore the term integrated planning
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was coined in order to bring budget planning and then the traditional monthly recurring planning
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together. So the term IBP really came around the years two thousand and was
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pushed as the next buzz. Then SAP decided to silence the former APO platform
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and replace it with something that accidentally was also called IBP, however completely did
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not cover the same concept. I still do believe that IBP as a name
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for the product that SAP has put on the market is very well chosen.
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However, at that particular point in time, it's simply, as Marcus said,
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has led to a lot of confusion and also to inflate expectations from all
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the customers that were initially looking into it. And SEP simply has had a
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very hard time in shedding off that initial frustration with what the IBP, and
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then I mean the SAP IBP platform was offering. But I do think that
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over time both the awareness and acceptance and the understanding of the market has increased
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a lot and therefore definitely but Marcus, you know more about this. The
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adoption of the IPP platform under the SAP modules has significantly increased. Could not
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more. I agree with you, Alex, right, I think that's exactly
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how it became right and still a source of confusion today. I think SAP
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has never been a very strong in choosing right names that we also can see
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with other products. Right, but at least the product detail, I think
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it is very good, but the naming was a little bit unknocked. Okay,
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So today we're talking about integrated business planning and not necessarily that one piece
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of software, that one product. So in breaking down these silos and bringing
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finance into it, is that just the current iteration of the evolution of this
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planning process or do we do we foresee additional silos breaking down and bringing other
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areas of business into it? Are there any that are still left out?
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Or is this the final frontier, if you will, for integrating all of
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the business units into this planning process? Alan by by by by definition we
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are consultants. We will always invent in your busts. We will always invent
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in your height. So you're you're you're not going to pin me joint on,
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pin me down on saying that this is now the pinnacle of the evolution
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that we achieved, never jokes aside to jokes aside. Yes, and we
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are already seeing the next trend. So once again I'm taking this same seven
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steps back. Initially is NOP was bringing sales and operations together. Then we
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wanted to have the third stakeholder around the table, which was then controlling or
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finance. But now we see that if we only leave it on that level
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of management, then in some cases it simply becomes a paper based exercise.
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Yes we do have the software behind it, but the decision which is taken
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does not get communicated, then does not get executed. So what we definitely
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see is now the integration with operations. And this is then I think over
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the last few years the sales and operations execution cycle or the SNOE if he
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wants to extend the letters soup towards that, and I do really believe that
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once we really then go towards the future, that's digital twinning and concurrent planning
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and operations or concurrent execution with assimilation based optimization definitely is something that also will
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find its place within planning systems. But this definitely is still under preparation.
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There is research going on in the first prototypes are being implemented. Definitely is
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not mainstream yet, but that's coming up. And then I think you brought
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a very good point, right, But the breaking silo, I think the
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METAFA works in all the different directions. Well. On the one SIDEA you
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break the sides within the company to include five financial view right, include other
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perspectives, but also we try to break decidos across. That's why I usually
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like the term more network planning. Right. We want to involve more participants
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in their planning not only within their own company with other companies, right,
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but also as alex and also with other levels of planning within a company,
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right, or also also with execution and the tactical planning and the strategic planning.
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We want to bring that more together. And at least from my perspective,
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I think we can see a trend that people understand that they can gain
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a certain benefit out of connecting to outside the sido, right, breaking the
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sider to say, I don't see my suppliers only as a company who serves
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me, but we need to work together. I don't see only the shop
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floor as someone to producing something, but we need to work together, right.
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And I think that's a general trend which as these I see in planning
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where people realize, yeah, I can get a certain benefit out of it
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if we work together. So we've both of you have talked about going back
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a few steps and looking back in the history. And so with that in
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mind, what has changed since since COVID in terms of business planning? I
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mean, obviously COVID has impacted every aspect of the supply chain. Everyone knows
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about supply chain since COVID, they think they're an expert. So what has
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changed in business planning that is specifically come from COVID that is impacting the way
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this trajectory is going now? I think in Chinese we usually have a term
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for a crisis, right, usually consists of two characters. One means risk,
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but the other character means opportunity. I think the COVID crisis made it
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very transparent that actually there is a certain potential for this. Now it's it's
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also a password to be agile. Right, people understood, our companies understood.
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The better I understand my supply chain, the better I can react.
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The more transparency I have, the better I can react to certain developments.
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In the past, certain development and may might have taken years now within COVID,
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it happened within months. And those companies who had this transparency, who
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had the ability to react to that change more quickly, could adapt. They
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were also more successful. And I think that brought it just more to delight,
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right, but contensed and say, oh, look there's a chancey And
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I think since then also companies realize there's a quite a potential here to be
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taken. Yeah, you're right, You're right, Marcus. However, I
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would want to challenge this traditional view a little bit because this is like a
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survivor bias. It's we hear all the stories of those who have been able
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to adapt, and we also hear all the stories of those who really completely
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perished and went under um. I think for me, the biggest change with
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COVID is that it was a transition period in which the operational uncertainty has become
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uncertain in itself. And let me try to explain this a little bit in
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the past, let's say twenty eighteen, twenty nineteen, and then all the
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happy years before that when we were also young and beautiful. Yes, we
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were at that point in time, we were planning for safety stocks. Why
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because we knew roughly what the demand variability was going to be, what the
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lead time uncertainty was going to be, so we knew and we could dimension
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and adapt to all of that. With COVID, all of a sudden,
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this uncertainty that we used to calculate and that we used to anticipate for in
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itself became a complete unknown factor. And I do believe that this is really
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the key thing that COVID's brought to is that, hey, guys, we
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also need to make sure that we have a good prediction of the risks that
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we are facing and that we are looking at. And in this sense,
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Marcus, I say, yes, you're completely right by the fact that we
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either as a risk or as an opportunity. But if you want to see
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for myself what we have learned from this crisis, then I do believe that
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we need to make a forecast not only about what the future demand is going
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to be, but also what all the other risks are going to be.
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And let me give just a very practical example. Nowadays, I ask my
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clients, are you making a forecast for your lead time? Are you monitoring
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when you will receive your goods? And everyone says yes, I'm doing this
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more or less but formalized a forecast for your future deliveries and your lead time
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in itself, it's hardly ever that we really see that. And here I
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think, Marcus, what what what I've seen that Westernacher is also doing with
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the data model and in the type of projects. This is something where you
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guys definitely can bring added value. Exact Again, now, we didn't want
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to agree so much, but I hear other would they agree again? Right?
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Uh, that's well, I'll also see this benefit of this edit you,
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right, because also with an example I also come from from a procument.
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I used to work that by her, right, And I remember fifteen
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years ago, if you would want to change something, you would take the
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phone to talk to your supply and say, okay, I need now instead
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of five hundred boxes of debt, I need maybe five hundred or two hundred
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boxes of another thing, right, And then you would ask him by when
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he could deliver right, and you usually last week I also encountered still a
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supply who is using facts tail effects machine if you remember that where you can
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effects things. So usually those kind of alignments would take often a week or
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two weeks to understand, because then after two weeks he come back, Oh
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yes, I can deliver you right today. Nobody is willing to wait that
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long. Right. Also, we as a customer, we are used from
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Amazon. If I see it online, I want to have it tomorrow or
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the next day. Right, nobody's is willing to say, Okay, you
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can come in the shop two weeks and then you you can pick it up.
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That's why I think also this bringing it together, this is the added
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benefit we can bring here, right. And I think maybe it's also a
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little bit too much here than to say with this peak data, connecting the
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data together, people understand there is an added value here, right, Because
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we always talk about artificial intelligence. We have a lot of data and people
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have the data, but we have not learned to connect it to each other.
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Right, and only by the connection one plus one is more than two.
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Right. So like it coordinates, if you have only one part of
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the coordinates, it will not help you by having two coordinates to better that's
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where you could gain the value from, right, And I think special companies
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learn with one more that this is really a benefit that they did not see
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that clearly maybe in the past. So you've both mentioned the software the tool
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itself now, so so let's talk a little bit more about that. What
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is the tool itself? What data is it able to bring in? Marcus,
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you are just talking about making sure that everybody is able to use all
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the data that they have. What what does the tool accomplish for companies?
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So IBP, to make it simple, right, enables this network planning.
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And one thing that that from my perspective, SAPTT in this sense quite well.
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They used Excel as a front end for this tool. Right, whatever
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do you tool you use or planning platform you take? Right in the end,
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it's a planning platform, right. But in this day they made a
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very smart move by using Excel because in the past, if I look at
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a lot of companies also what you mentioned, Alex with snop right in Finance
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World, Excel list is that planning tool, right, noble, And there's
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no tool beating that because everybody is used to it. If you try to
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train people, no need to train because they know how to use Excel right,
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And and with sap IPP you have the chance to collect all this information
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together, bring it into get into a common planning logic and gain transparency.
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Okay, what would that mean if I would delay now my production here by
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five days or one week or two weeks? What impact does it has on
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the other side, on the downstream and upstream, right? And I think
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that's that's quite a benefit I can see in many companies when they realize that
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they really appreciate it. Personally, I was extremely skeptical in the beginning when
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I remember, I think I got a sneak preview of the beta version of
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IBP it must have been ten years ago briefly when they proposed or suggested that
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it would be Excel based, and I thought, well, okay, this
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is extremely childish. I make Excel files just as a prototype, as as
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a quick way to showcase a proof of concept. Is SEP really going to
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downgrade the EPO platform towards some kind of an Excel So I was extremely skeptical,
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And I think it also has taken time before companies were actually adapting to
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the fact that there is this entire machine behind it. It is just a
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slim client that you see in an Excel front tense, but it's it's it's
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what is behind the hood, and it's the entire motor and the engine that
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still has been the same, even has been significantly upgraded. And for myself,
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it really has taken me five times and I think five project or so
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to be convinced of the fact that indeed it has been an improvement. Marcus,
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what's what's your impression on how it had been perceived in the beginning on
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that, Yes, say the same like you, right, I saw the
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ibperod roughly in twenty fifteen, so now eight years right in the beginning.
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But the nice thing about Excel was, and that was also for us one
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of the positive aspects when we started implementing that, right, because planners could
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identify them very quite well with this use the interface right. Of course you
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need to bring in it as a lot of logic, but as a user
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interface. Actually, I think it's perfect because people work with that every day.
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They the adoption time is quite fick. If you bring in a new
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interface like the SAP, Theoria Apple or something else that takes much longer,
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but with the excel H Once, as you said, you overcome this this
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understanding. Okay, this is a front and I see some data in right,
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I can work with that data. But behind it there is a complicated
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machine trying to optimize my supply chain, trying to give me proposals and so
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on. Once you understand this, I think it's it's quite a powerful tool.
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And also, just to response to you, Alan, I do think
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that if you compare sap IBP to any other tools that are currently on the
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market, because there are many more, I do think that there are two
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reasons why sap IBP always needs to be taken into consideration whenever a company is
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looking for something on a market. First is what markets now is saying,
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it's it's the adoption time for the end user. Also, the ease with
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which scenarios can be generated, because it then simply is just a copy of
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your front end and you save it quickly somewhere. And it is also has
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been recognized by market research that the ease with which scenarios can be generated and
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the speed of decision with all of that is actually unparalleled compared to most of
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the other tools. And then the second thing is that well, like it
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or not, SAP as an EARP platform is still in many companies as the
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basis. And then the integration with what the EARP is a transactional backbone is
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offering in the beginning, and then I think it's two thousand ten aged early
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years there really was a hiccup that there was a difficulty, but also there
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over time SP has has made significant improvement also with once again the letter soup
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the PPDS, so the production Planning and Details scheduling module which is now also
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a part of the EARP transactional backbone, but it's previously that was something on
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top of it. The way in which all of this is then being integrated
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is much more sleek, much more efficient. So in summary, what are
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the added values? I do believe it's the adoption of an Excel based front
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tent, which may seem child isn't simplified, but indeed for the end users
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really has an added value. Secondly, the scenario plan and the fact that
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a SEP simply can never be ignored whenever there already is an SEP platform.
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Both of you make a great point that when it comes to adoption of any
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new technology in any circumstance. It doesn't matter if it's you know, quick
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books in accounting or you know, the Windows Suite for new users. When
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it comes to something familiar, something simple, that makes adoption so much easier
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for the overall rollout of this new product. So, I think, especially
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historically, since a lot of supply chain organizations or departments have used Excel just
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as their record keeping and doing things in house, they use Excel to manage
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their supply chain. So translating over and seeing something familiar, seeing something that
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they know how to work with, gives them that springboard into okay, yeah,
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I'll get into this and then you can work on the teaching of what
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else is possible with that engine behind it that's going to drive the additional value.
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So what are some of the other differentiators or are there any other differentiators?
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I mean, Alex, you just mentioned that obviously the Excel interface is
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a differentiator compared to other platforms that are available on the market. Is there
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anything else in the results that it can bring that is a differentiator for this
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product? One thing I think that also SAP themselves, they stressed to less
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right. I think SAP IBP is an abstract platform planning platform, So you
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are not it's on mandatory to have an EARP backbone from SAP behind it,
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right, because it's meant to be a separate layer where you can interface dating
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and so. Like your example, if some people would have data records in
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Excel already, theoretically they could use that as the database and feed it with
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IBP, right, and in IBP would online calculate the plan great, the
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production plan. Also we've this kind of data. Historically, SAP focused a
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lot of their own products, but I think this is also one one big
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advantage of this ASAP the integration. Of course you need to do it,
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but at the same time it offers you some opportunities that you also can connect
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to other non SAP systems. Right. It's in a lot of marketing slides,
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but in reality I have not seen much of those implementations. But theoretically
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it could do that, and uh we had yeah, falling always back to
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the old patterns. Right. Of course, people used to use SAP is
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to continue using a SAP, but people not using SAP might not think about
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SAPA IPS a potential tool. But in theory it could also do that.
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Right, then I think that I also did not see if with a lot
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of other planning tools. Okay, so it's it's got some adaptability for existing
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users as well as new users and systems. Yes, and other systems exactly,
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other legacy systems that might be in place. So do you have any
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customer success stories that you can share or any examples of where this has really
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driven value for a client. One are the implementation I started growing with Right.
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It's a jewelry manufacturer producing stones. Right. I worked for Soofsky before
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Right, and within Soovski it was also the past us. We created our
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own applications in SAP set programming. I think Alex you know that, right.
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A lot of companies they create their own setbox right, and we would
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download it, put it into Excel and some people do manual number crunch right.
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And there was quite some resistance when we introduced that project because people were
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thinking, but all those special processes that I have, you can never bring
23:21
that into a into a planning system, right. But by working with the
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users, I think we came to a point that today people are now used
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to have this. We call it finite planning. Right. So you have
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a plan which is optimized by an optimizer to to bring you an optimize plan.
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They are now relying on that plan, right. So in the past
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somehow they were not able. Are it took almost one week to come up
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with a production then now they get it overnight, right and with the capabilities
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what Alex mentioned by improving that we are now targeting to go into a scenario
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planning that you can do certain scenario within minutes, right. So, and
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I think people understand by freeing them up from all these manual efforts doing a
24:11
bomb explosions manual, doing some number crunching manually, that doesn't need to be
24:15
done anymore, they now really can focus on more strategically on really something that
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a planner can bring value to. Right to understand, Ah, do I
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need to adjust some parameter meeters here? Do I need to move stock here?
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Or what would happen here? And here? I think by looking at
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this, people also get more more fun, are more active in their in
24:38
their planning activities. And I think that's nice to watch. I want to
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come back to something that Marcus certain before, um, what what what is
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the typical case where IBP SAP IBP could be a potential success? So I
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will not have a look at what are the effective success stories? But rother
25:00
where where can it be successful? Because it is not for every single company.
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There are definitely cases where I would not even consider by putting SAP IBP
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in a recommendation. So what would be done the typical sweet spot? Definitely,
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whenever there already is an SAP ERP backbone in theory, you could actually
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be ARP independent. In practice, however, I have never seen it,
25:25
and I do not even think that there really is the appetite to really venture
25:30
into such an adventure. So this is one of the first things. Secondly,
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in the past there has been this APO platform that has been quite successful
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on the market, and in the transition towards IBP, there has been a
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turbulence in a market created whereby a lot of other vendors simply jimmed on top
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of it. Not all of them have been that successful. And there is
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now this second wave of pro checks whereby there is once again a revision of
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hey, where be successful with this non SAP solution? And that is like,
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how would I say some kind of psychological reminiscence of Hey, this SAP
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time was was not that bad in the end, which should not be underestimated
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alan and there still is a lot of knowledge within a lot of IT departments
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about how SAP is thinking. And it's this baseline that still is implemented inherently
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within the IBP platform. So in short, if you have an EARP backbone,
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and you have already a strong user adoption and an IT knowledge of what
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the SAP platform can bring you, if those free or combined, then your
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IVP implementation can be a success. If you diverge any way from any of
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the previous then it can become difficult, or it would that you need an
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external technical consultant like the guys from Western that they would then have to complement
27:07
the business side. So it's not impossible, it just makes adoption a lot
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more difficult. And so having that sweet spot is where companies can really go
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into this, into this venture, into this implementation with a lot more confidence
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that this is going to produce results in the short and medium term. They
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don't have a long implementation, a long user adoption, a long transition into
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getting this to a point where it is going to be effective. Don't get
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to okay, it walk in the park. Okay. So that's that's fair,
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It's it's never a walk in the park. But we we know that
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implementations of software or new programs are going to have hiccups. There's going to
27:56
be bumps in the road. It's going to take a while but before you're
28:00
going to see any tangible results from that. But it's those those emergencies or
28:07
there's the aha moment where something, oh I didn't think about that, I
28:10
didn't think how this was going to affect something, or or there's a bump
28:14
in the road and everything gets tabled for a while because you've got to deal
28:18
with this emergency over here, and things take a lot longer because you have
28:22
to you know, get this this software to talk to that software, and
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there's additional programming and custom things that need done, and you know, that
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makes it very difficult for companies, especially if they've had that type of experience
28:34
in the past with a new program or a new adoption that went sideways or
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that didn't deliver results in the past, that then they're more hesitant to consider
28:45
something. So what I hear you saying is that when you've got this this
28:49
arp in the background, when they've when they've got this technical knowledge already in
28:53
place, it's a lot smoother. Yeah, Marcus, would I would be
28:56
eager to your experience on this how the gradual functionality extension with the SAP IBP
29:04
platform can be realized. Um yes, especially when IBB came out very earlier,
29:11
right, the functionality was quite limited, and I think it was a
29:15
good way they they and also with IBP we have every three months, right,
29:19
we have a new release that companies they are forced or it's mandatory to
29:26
apply those those upgrades. That also made them more staying close to the standard.
29:32
Right like not in the past they would do the high an army of
29:37
id dies in their own company and they would program a totally different system.
29:41
Right. Um So I see from at that point people are also waiting for
29:47
the for functionalities in the road may come. So they they are eager to
29:49
use the standards and which is a good thing. Right. So they also
29:55
tried to talk more the same language. And also about six months ago,
29:59
I had a interesting talk because like you are, Alex, I would have
30:03
put the same points for those sweet spots who would adopt IBP. Right.
30:07
I was talking to an electrictricity company who is also using IBP for their planning.
30:15
Right that was at that time where you had had this crisis in Europe
30:18
where you had had to react quickly because prices going up and down, and
30:25
they found in IBP or they were lucky. They thought they were lucky that
30:30
they had because they do all this this planning with this uh easy interface,
30:37
where with doing scenaris and so on. I think I would not have never
30:41
thought of that, but seems like there is certain creativity there to also adopt
30:45
those kind of functionality, and I think with the gradual role out of all
30:48
these functionalities, I think we will find more more scenaris where this could also
30:52
be used. Right, But of course, as you said, Alex,
30:56
SAP is traditionally more production for because discrete industry a system where you talk about
31:03
production and manufacturing and how to organize your resources. I think with IBP will
31:11
you also have certain possibilities to extend it to other industries, so other ways
31:15
of working that you party also could not have done with APO before. Right,
31:19
You're you're completely right now because when when when we do then sometimes planning
31:23
observation or we do a shadow run with the planning department on how they're using
31:29
systems. I can remember in the past when we were doing process documentation for
31:34
APO, we always had to completely start from scratch because you never knew what
31:38
you were going to discover, and in many cases it was do I dare
31:44
to say this element? It was ugliness what we found that ends in a
31:48
process or then clicking on a button that something was uploaded but no one looked
31:53
at it anymore. This with IBP is something that I do think has been
31:59
prevented. So when we now do a process documentation of what a planning department
32:02
is doing, we can start from the assumption, okay, we roughly know
32:07
what we are going to discover because in the back one IBP implementation at company
32:14
one is going to be somehow reminiscent of the implementation at company two. Yes,
32:20
there will be pepper and salt and spices left and right sprinkled on top
32:22
of it, and a little bit of pixie dust, but the basic ingredients
32:29
are there. And this is also something that whenever we come in we first
32:35
have a small chat with the guys from WESTERNACH because you have this three monthly
32:38
update cycle by hey, guys, can you simply give us back the default
32:43
documentation the latest standard, because we, as me BACH, we will not
32:46
try to keep up to a date with this release cycle ourselves. This is
32:51
why we go back to Westernacher and then there is simply this exchange of documentation,
32:54
so we have a basis to start from. Exactly So, Marcus,
32:59
I love that you brought up the different industries outside of the traditional manufacturing and
33:05
production are able to make use of this tool. A utility company or an
33:09
electric company is very far from production. You wouldn't expect that that was something
33:16
they could do, but they do have to produce a service and a product
33:22
to deliver to their clients. Are there any other industries that are surprisingly adapting
33:29
to this particular tool greater or in a better way than you thought that they
33:35
would? Just off the cuff? This utility was one of the more surprises
33:39
I cut. Right. But in the end, if you think about it,
33:42
it's very logical, right. It's in the end bringing demand and supply
33:45
together. Right. So, and wherever you have this topic and planning is
33:49
nothing else than that, right, Planning is somehow anticipating your future and try
33:54
to make your best decision based on what you know now, right and think
33:59
with this mind, we could detach from this traditional approach and say, okay,
34:04
what are other scenarios where we can bring in together this demand and supply,
34:08
where we have to follow certain constraints or have to understand how does my
34:15
situation look like? Right? I think potentially in the coming years there will
34:21
be the new fields where we could do that, right. And at the
34:27
moment, the one I saw them most surprisingly was was this, But I
34:30
think I could think of service industry, right. You could also do party
34:35
things like this. It's just how you could connect the data and and that's
34:38
a nice thing also with IBP from a technical point view, you can bring
34:42
in whatever you want, right, You just need to map it. You
34:45
need to need to build the interfaces to bring the data together. In the
34:47
end, as we always break it down on a technical level, it's also
34:52
always a zero one binary thing, right, data And as I mentioned in
34:57
the beginning, that to the potential is how to bring that data togetter to
35:02
gain some value out of it. Yeah, well, Alan, and you
35:05
will always have these fringe implementations. But then I would not have looked specifically
35:13
at SAP IBP. It's just planning in general. It would have been any
35:16
kind of tool and an E then there would have been weird as to say,
35:22
the coolest things I remember was the distribution of change money amongst banks within
35:29
Europe, Like how many of these smaller coins you need to have added various
35:32
cashiers. This in itself apparently tends to coagulate in certain distribution hubs, and
35:39
then you need to distribute once again to the small towns with all the logistics
35:44
back and forth. Weird my coincidence this was this was done an sap IBP,
35:50
but it could have been any other tool. Also here it was actually
35:52
the process modeling behind it was much more important. And then another thing that
35:58
I've found a pretty remarkable one that was the distribution that was done in India
36:05
of during the religious festivals of a certain type of cookery machines. Because on
36:12
a religious festival there are sometimes multiples of thousands pilgrims that come to a certain
36:17
spot, all that need to be catered for and that needs to have also
36:22
their meals, et cetera, for which there is a complete separate industry that
36:25
really makes this huge batches of meal and the entire planning behind it is also
36:31
a certain kind of governmental agency that kind of coordinates all of this apparently also
36:37
done an sap i EP, which I found completely astonishing. However, these
36:43
are these fringe implementations that it could have been any kind of d planning tool.
36:47
Also here I do believe the process behind it is much more important.
36:52
And in both cases I really wonder what is the bill of material looking like,
36:55
what is the bill of resources? How do the planet that action actually
37:00
or is it simply making an inappropriate use of the tool that actually could have
37:05
been done in an excell file but they just want to fancy it up so
37:10
or a mine or they felt that, you know, failure wasn't an option,
37:15
so they had to go with something that was not going to have any
37:20
of that you know, uncertainty about it. Yeah, that's more the psychological
37:23
insurance premium that you pay on top of that exactly. But I think you
37:29
also mentioned a very could point the n X right. So also I also
37:32
here again I agree with you, right, I think it's always a good
37:37
understanding of what's the planning problem you want to solve some meaning you need to
37:40
understand the process. Only by having that you can use a right tool in
37:46
the in the right in the right way. Right. So if you don't
37:50
know about the process, even to like SAP I BP will not help you
37:52
much. Right, So it's always a combination of both. You need to
37:57
know what's the process, what's the problem you want to solve, and how
38:00
to use the tool that that you want to use to solve that problem.
38:04
Right. If one of those two is missing, you could have a very
38:07
good process. But if you have a very uh not so interesting tool like
38:10
Excel, right, then it also does not help you. Right. But
38:15
I think that's that's the sweet spot between those two two things. That's why
38:20
that's why I think we also cooperate so good with Mebach right that we say
38:23
they're on the one side, Alex Mebach provides the process, the understanding,
38:29
and we on our side, we provide the technical expertise on the tool.
38:32
It's how to use that. Any further remarks or any last minute things that
38:37
we need to discuss or to bring up before we close out today, I
38:43
think we are in a very as we also discuss before writing, in a
38:46
very interesting time now because as we all see also with migrating all the old
38:52
APO implementation, I think when a time where you can really make an impact
38:58
to a lot of the planning logics, planning platforms in the different companies,
39:04
right and I also see it in demand here also with our clients, right.
39:09
I think from a supply chain point of view, it's a very interesting
39:15
time to be in because here now you see a lot of innovations. You'll
39:17
see a lot of movement, so people are willing to more open to accept
39:24
other approaches, is to accept other tools. I think it's a very exciting
39:29
time for someone being in supply chain right, independent of with the Corona crisis
39:36
or whatever. But if I look at ten years fifteen years back, I
39:40
think probably now it's it's even more exciting time to be here. I'm always
39:45
close with the following. So we've we've been talking about planning, and I
39:50
think we've kicked a few open doors by the fact that you need the process
39:53
here obvious everyone knows is that you need to find out its first, your
39:59
industry, a footprint, and that planning is only a modulation of all of
40:01
that. And in some kind of scenarios, I would say, kind of
40:06
boring, this is what you already know for for one hundred years. There
40:08
is, however, a very clear trend that is is coming up that planning
40:13
is moving towards a single process. In the past, it was all splits
40:16
in between short term planning, midterm planning, long term planning, financial planning,
40:22
marketing planning. This is really getting mingled up into just one sausage a
40:28
German for something I like it, we have a same for that. But
40:34
also that at the same time, this entire planning horizon is just one and
40:38
that you can kind of mentally come from the extreme short term towards the long
40:44
term. In the past, these were different solution databases and you needed to
40:49
communicate between these solution databases with all the interfacing problems in between, etc.
40:55
So that in the end, planning is about taking decisions and that there is
41:00
now simply one container in which all these decisions can actually fit in. And
41:05
this is completely new. This is like a massive revolution, and I think
41:09
we're just in the beginning because this implies that this full background automation of planning,
41:16
so that you actually come to touchless planning, and that the planning will
41:20
learn from your previous decisions and then you have some kind of self learning business
41:24
optimization towards the target that you have. I really believe that we're at the
41:30
beginning of this and this is a breakthrough of which with the complete letter soup
41:36
of what is within the SAP portfolio sac IMPPPPD as whatever you name it.
41:43
They do have a constellation of some tools with pros and cons and it's not
41:46
ideal, but at least SAP really has a movement towards this ideal and they're
41:52
moving in this direction. They're not the only one. Other vendors are doing
41:57
this too. But for us as consultants, there is the SAP strict world,
42:04
and certainly as a German consulting company within Germany, even more pronounced,
42:08
there are companies that simply stick to SAP and no questions asked that anything else
42:14
would ever enter it. By extension, in Europe worldwide it's a little bit
42:19
less pronounced. And if so, yeah, then we have westernacher for anything
42:22
else, which would be the non SAP world. Yeah, then then m
42:25
back, We've got other partnerships as well. So in the end, short
42:30
statement, I do believe that we are on the brink of an other revolution
42:36
within supply chain planning. With all the arguments that I just gave, I
42:39
agree with both of you. It is a very interesting time to be working
42:43
in supply chain because the changes are coming so fast and they are systemic so
42:49
a change comes and it affects everything. Because we have broken down those silos.
42:54
We aren't working in those those little business pockets anymore. It's all inclusive
43:00
and it's exciting to see, and it's exciting to see companies react to it,
43:06
and it's exciting to see end users and consumers react to it. It's
43:09
exciting to see the words supply chain in the newspaper, and people are interested
43:14
in it. Now we're not just the weird nerds in the back room playing
43:16
with Excel. Yeah. And also people understand actually planning is about as you
43:22
said, Alex, right about decision making. It requires some brain right.
43:27
And also I think planning is the beginning of all your execution. And I
43:32
think people also start to realize that that whatever you can make up in planning,
43:38
you don't need to make it up in execution anymore. Right, So
43:42
I think that's also a nice thing that they understand. Oh, actually,
43:46
the smartest guys in the room usually add the planners because they start the whole
43:52
process to tell me what to produce and so on, right, and so
43:54
I don't need to do all this firefighting and all that stuff anymore. Well,
43:59
that brings us to the end of our episode today. Thank you guys
44:02
so much, Marcus and Alex for joining us. This has been a fantastic
44:06
discussion. We are always looking for new guests on our show to talk about
44:10
some of the more interesting aspects of supply chain, So if any of our
44:15
listeners out there have any ideas for additional topics, or if you'd like to
44:19
be a guest on our show, please reach out to me at podcast at
44:22
mebak dot com. As always, thank you for listening to Speaking of Supply
44:25
Chain. If you've enjoyed the show, hit that subscribe or that like button,
44:30
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44:35
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