In my SCPM is more than just metrics (Part 1: Is SCPM all about KPIs/Metrics?) we explored that SAP BusinessObjects Supply Chain Performance Management (SCPM) is about relationship between KPIs/metrics and analyzing the past to make better business decisions but we need to be proactive not reactive while making these business decisions. We need simulation and we need to understand how external variables affect our business priorities.
Is SCPM all about analyzing the past? No, we can be pro-active and understand how variables (‘% increase in Fuel’, ‘Inflation’, ‘Interest’ …) affect our priorities and hence take wise business decisions.
Let work with an example understand how we can be proactive.
Logistics Costs accounts for high percentage of all company costs. Hence there is an increased focus to reduce logistics cost. To make sound business decisions and understand our risks it would also be important to understand how external factors like ‘inflation’, ‘% increase in fuel’… have an impact logistics cost.
Using What-If-Analysis in SCPM we can understand and analyze how variables affect our priorities (logistics cost, POF…) so that we can be proactive and not just reactive.
Conclusion, SCPM is about Improved Supply Chain visibility and efficiency with SCPM, SCPM is more than just metrics (Part 1: Is SCPM all about KPIs/Metrics?), and simulation and affect of variables on our business priorities.