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Customer Centric Supply Chain

in the not too distant future:

As Ms. Shopper walks through the parking lot of her preferred local grocery store
her phone fires off her favorite ring tone notifying her that there is a
message waiting .She retrieves the phone from her bag and finds that the stores
loyalty program she has signed up for has discovered she has arrived at the
store. Part of the sign up was the option to use her phones GPS systems to find
her when she appears to be near a store. She also signed up for push offers so
along with the welcome she is also receiving offers and deals that the system
has found for her.

  She created a shopping list on line that is now sorted by the store layout so the
system already knows where everything is and begins to walk her through the
store. She has opted in to allow the meat guys to pick out her meat for her
(she really has no idea what “good” meat looks like). She does know
her produce so she did not opt in for the produce selection option and will
pick the produce last.

As she walks the floor the system guides her and as she approaches certain
products that she has shown a propensity to purchase she is given notifications
of “deals” or offers that suppliers have agreed to with the category
managers. The system delivers coupons that make sense to her so she never has
to worry about missing that killer deal. She marvels at how this store always
seems to be in stock on the products she wants, not to mention the products
that the system has recommended to her. Seems that this store, compared to some
of the other places she shops, is clean, well run and a pleasure to be in.

   As she completes her shopping trip and heads for the register to check out the
store manager approaches her, calls her by her name and hands her a $10 coupon
that she can apply to this order and thanks her for her loyalty. She leaves the
store wondering why she would ever shop anywhere else.


Earlier in the day:

That same store manager is walking the store and his mobile device (take your pick)
sends him a buzz. He pulls the device and finds the exception is a potential
out of stock. His system has been monitoring the point of sale data and has
found an ad item that is selling way beyond expectations.


Those expectations are set by the system based on normal movement plus the lift that
the category managers have determined. That “lift” is based on the
systems analysis of past promotions and the convergence of retail and consumer
intent to purchase, the combination of art and science if you will. In this
case the actual consumer reaction has greatly exceeded expectations and the
system while resetting the sales forecast has noticed that if no action is
taken at this store there will be an out of stock.

The store manager sends a workflow from his device to his stock clerk to do a check
of the product location to verify what the system thinks is real and to put in
motion the out of stock resolution process. The clerk executes the workflow and
kicks off the OSR process (what would a good process be without a 3 letter

Because this is a system that thinks end to end it has already started preparations for
the OSR process. It determines that the quickest way to bring the product to
this store is to source it from a local store and not from the warehouse.
Fortunately this company had developed a customer centric attitude and included
the supply chain in its transformation. The company determined, while not
necessarily the most “efficient” way, that having smaller vehicles
strategically placed throughout the network would enable the stores to be more
nimble and in most cases much more reactive to the real demand signals, their
shoppers. It determined that, in its pursuit of its shoppers loyalty, it was
much more important to turn an out of stock into a satisfied customer than to
sacrifice that service at the altar of efficiencies and cost effective supply

The system has determined that a store a couple of miles away has enough safety
stock to afford sending enough inventory to the out of stock store to get it by
until its next delivery. That next order by the way has been adjusted to
reflect the new adjusted forecast. The driver and sending store are notified of
the pending transfer and when the receiving store executes the work flow the
OSR process kicks in and the transfer is executed flawlessly, completely
eliminating the potential out of stock and making sure the shelf is stocked
when Ms. Shopper shows up several hours later.

Fantasy? Not really……this is an example of what can be accomplished TODAY! It’s an
example of what a real time customer focused supply chain can accomplish. Can
you pull it off with existing legacy applications or best of breed point


Maybe….maybe not. Point solutions by their very nature are designed to optimize very
specific business processes and while they do a good job of that they just
don’t / can’t think beyond what they do for a living. Ask your
“traditional” WMS or Trans solutions to include the store or customer
in the way they process data and the answer will not be what you need to pull
off a customer focused supply chain. 

SAP on the other hand, by its very nature, thinks end to end. We offer a platform
if you will that brings world class process specific capabilities to both the
Trans and WMS worlds along with the ability to extend the process (the
scorecard if you will) across the entire supply chain. From the vendor through
to the shopper, the SAP platform enables thought provoking process change that
can virtually alter the entire way companies THINK about the supply chain let
alone execute like never before.

How? The combination of the platform, world class capabilities in the execution
focused Trans and WMS world, and real time planning solutions like Precision
Retailing, FNR(forecasting and Replenishment &PMR(Promotion Management for Retail)
brings end to end capabilities that have never existed before. When you add the
amazing speed of HANA and the integrated analytics of SAP Business Objects for
incredible visualizations you truly have the ability to create a real custome
r centric
supply chain.

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