by Kelvin Fraser
Driving Operational Excellence with S/4 HANA
There comes a time in the life of every business when it has to acknowledge that it has outgrown a once state-of-the-art IT system. This is usually driven by a combination of business ambition and, in today’s environment, technology innovations offering functionality that, even five years ago, would have been a pipe dream - which in turn fuel increasingly high customer expectations.
The new digital economy is a world where enterprises need to be connected, to grow - and often to survive.
Technology has moved from being a system of record, which processed and stored data that could then be manually evaluated, to being a system of intelligence that analyses what is happening in real-time and makes recommendations based on the results.
This is providing businesses with unprecedented opportunities to transform the way they operate, to ‘Go Digital’ by connecting people, processes and things to generate business intelligence across a range of key business activities.
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In the SAP world, running S/4 HANA Enterprise Resource Planning (ERP) software using the HANA in-memory database enables this transformation. How?
First of all, processing information ‘in memory’ directly, rather than reading from and writing to disk data storage, facilitates a sea change in system performance. The simplified HANA database removes aggregation and history tables providing fast accurate information on demand and at the lowest level of granularity providing a single version of the truth. New simplified processes in the S/4 HANA suite provide additional functions and analytics, removing the burden of siloed data and separate legacy systems, for planning and business intelligence.
All of this adds up to accelerate business processes, deliver more business intelligence in real-time and simplify the IT environment.
S/4 HANA is the key that unlocks the digital door. Organisations can optimise the processes they have as well as and more rapidly innovative and deploy new ones, providing new possibilities to thrive as the digital economy increasingly gathers pace. S/4 HANA is centred on connectivity; it reduces the complexity in an organisation’s IT infrastructure caused by multiple systems and interfaces, enabling smooth interactions.
In practice, for the supply chain and logistics industry this offers extensive benefits. For example, an international logistics operation needs an accurate picture of what it has in its supply network in order to optimise stocks according to demand. This is a constantly changing picture as orders are received (and potentially changed), and stocks are delivered.
With S/4 HANA, planners can make decisions on supply and demand based on real-time information and react to changes as they happen, reducing the threat of running out of stock and the resulting inability to meet demand, thereby lowering the risk of revenue loss. The reduced time to action enabled by S/4 HANA improves stock availability, which, in turn reduces the level of safety stock, reducing warehouse costs. Issues can be identified more quickly, handled more effectively with more accurate information – and even pre-empted.
Material Requirements Planning (MRP) has traditionally been run overnight on a batch basis, but in fast moving environments this effectively means it is immediately out-of-date. Additionally stock requirement lists generated in MRP that produce large amounts of information, are time-consuming to analyse and compound the fact that the information is out of date.
Running MRP in S/4 HANA gives real-time data on inventory in the supply network. Tools are provided within the planning transaction to make collaboration easier. Communication between all the different elements that comprise a logistics function - hauliers, suppliers, warehouses, etc – is improved because information is in real-time.
Shortfalls in supply are identified by exception and presented in real-time based analytics. This has the effect of providing meaningful insight into the current supply situation without the need for intensive information gathering. Options for resolving issues are presented by S/4 HANA; these include enabling the expedition of current supply, placing a new order and using different supply sources, as well as the simulation of stock movements within the network to determine the best resolution of supply shortfalls.
The net result is an optimised process that reduces MRP run time up to tenfold, which decreases the time it takes to act on the information, thereby increasing performance.
The digital core
The ability to immediately turn information into actions makes a logistics operator highly efficient - as well as attractive to suppliers - thereby enabling business growth.
S/4 HANA provides organisations with a ‘digital core’ that will let them flourish in the connected digital landscape. If you’re wondering how to make the journey from the old to the new economy as smoothly as possible and want to find out more about HANA and S/4 HANA contact Rocket.
Find out how we can give you the knowledge and insight to make the right decision for your business.
• SAP S/4 HANA is the key to transformation. It enables companies to transition to the future and run simple, opening the door to the digital economy.
• SAP HANA offers unprecedented speed and accuracy for handling data meaning business operations can take place in real-time.
• Adding intelligence through S/4 HANA provides powerful analysis and network planning capabilities.