The Power of Pumpkin – A Halloween Story for Procurement
It is almost time for Halloween. And that means that we will soon see witches and warlocks everywhere – and of course: pumpkins. Whether it is the classic “It’s the Great Pumpkin, Charlie Brown” television show re-run, the pumpkin-shaped candy holders, or the home-made carved jack-o-lanterns, pumpkins are certainly a mainstay in the lore of Halloween.
What does that mean for businesses? Well, especially if you are in food and beverage industry, it means that you will likely be offering your wares with pumpkin spices, be it in coffees, baked goods, or even pumpkin seeds in salads.
Now imagine if you were a national chain, and decided to capitalize on a holiday – say, pumpkin-flavored baked goods, just in time for Halloween.
The good news: it is very popular.
The bad news: it is too popular. Meaning that your supplier was no longer able to meet the customer demand for the pumpkin-spiced baked goods.
No one wants to miss out on the holidays. So if you are managing this national chain, you want to immediately understand what happened. Of course, if you are using SAP S/4HANA with the SAP Fiori user experience, you can easily access procurement information in one single dashboard, which includes core ERP data, as well as information from the SAP Ariba Network. That means you can tap into the supplier network and see the supplier evaluations. Do they have a history of being unreliable? Are there circumstances (such as weather) that did not allow your primary supplier to deliver on the promised pumpkins? Are they a small supplier and were simply overwhelmed with the demand for the new product?
Let’s say that in this instance, the supplier was a small regional vendor that simply did not have the capacity to deliver for the overwhelming demand. But the analysis available in the procurement cockpit with SAP S/4HANA, and additional vendors connected to the SAP Ariba Network, also allowed you to immediately identify an additional vendor that had a global presence, and could supplement the orders. And with the visibility through the supplier network, you were able to negotiate a 12% discount on obtaining your needed pumpkins.*
Which means your pumpkin-spiced baked goods are back on the shelves.
Now imagine how that kind of visibility could help you in the long-term in finding new suppliers and negotiating with them? Even if your products don’t necessarily relate to the “trick or treat” knocks on your door.
Want to know more? Visit http://www.sap.com/s4hana. And for specific procurement solutions, read more at http://go.sap.com/solution/lob/sourcing-procurement.html.
* Improvement ranges are SAP estimates for a hypothetical ~$3B Manufacturing company as sample.