Digital Supply Chain

The Digital Economy:

Business networks drive a sharing economy:

Every business is more heavily dependent on its network of partners than ever before as we leverage contract manufacturers, logistics service providers, and other third-party organizations to expand reach and improve customer service. If not managed properly, this can result in wasted resources, higher operating costs, lost sales, and increased supply chain risk. It is critical to share information, experience, and processes to align and coordinate business decisions and collaborate across business networks.

There are numerous types of networks. For example, product stewardship networks manage global product safety and compliance across a global network of suppliers; manufacturing networks enable visibility and collaboration with both internal and contract manufacturing sites; and asset networks optimize asset usage, performance, and availability. These and other networks (and networks of networks) will be the platforms on which successful businesses innovate, collaborate, grow, and continually evolve – at both speed and scale.

Running a sustainable business in the face of resource scarcity:

Demand is exceeding supply for many resources around the world. Raw materials such as water,minerals, oil, and gas are key components to many supply chains, but obtaining them is often a challenge. Labor scarcity is also a major issue, with the aging and shrinking workforce struggling to adapt to the changing skill sets required by the extended supply chain. These challenges increase risk for an organization and drive the need for alternate formulas and recipes and sustainable manufacturing. Alternate sources of energy and leveraging reused or recycled materials are also key to lowering supply chain costs.

Steps to digitize supply chain:

Re-imagine:

The right strategy always gives results. Start reimagining your business outcomes and more customer centric 

BUSINESS MODELS

• Drive business based on a true picture of customer demand, both structured and unstructured
• Deliver individualized products and services
• Leverage product platforms as a base for customization
• Leverage your network of partners to better design, make, and deliver products
• Take into account the scarcity of natural resources and talent in a sustainable business model

BUSINESS PROCESSES
Change or eliminate fundamental business processes by leveraging digital technologies to:

• Create more connected, market-driven, and customer-centric distribution networks
• Drive cross-departmental and company planning processes
• Transform asset management with predictive,connective capabilities
• Leverage the Big Data now available to drive predictive decision support and end-to-end visibility

WORK

• Automate non-value-added tasks in areas such as the warehouse and production floor
• Boost productivity and decision support by getting the right information to the right people to help them do their jobs more efficiently
• Improve user experience with self-learning software that enables workers to be more effective and efficient with 3D visualization and other interactive technologies

Platform:

In order to reimagine the business a right platform must be in place. This platform must have the digital capabilities. The right technology enables agility and provides environment to create innovation

SAP’s digital framework for the extended supply chain is based on the five key pillars of a digital plan and architecture:

1. Customer-centricity across all channels
2. Individualized products driven by Industry 4.0 and IoT to enable new business models and increase the need to manage Big Data
3. Sharing economy across all business networks
4. Optimizing scarce resources such as people and natural resources in a sustainable world
5. Real-time visibility across core business processes such as supply chain, R&D, manufacturing, and operations

With right strategy in business and right platform in place, the ROI will be high.

GST Implementation for Malaysia

Localisation – GST Implementation for Malaysia

About Swisslog

Swisslog designs, develops and delivers best-in-class automation solutions for forward-thinking hospitals, warehouses and distribution centers. Swisslog is an inspiring global organization in more than 20 countries on four continents and customers in more than 50 countries. Headquartered in Buchs/Aarau, Switzerland, the Swisslog group is organized in two business areas, Healthcare Solutions (HCS) and Warehouse & Distribution Solutions (WDS). 

GST Malaysia:

The Goods and Services Tax (GST) is a value added tax in Malaysia. GST is levied on most transactions in the production process, but is refunded to all parties in the chain of production other than the final consumer.

GST Implementation challenges:

• Limited knowledge on Tax codes by business
• Short duration for GST implementation
• Migration of master data and transaction data from legacy system (MYOB) to SAP
• Fulfilling legal compliance
• Generation of FORM-03

Implementation methodology:

There are 12 work packages in the implementation

• GST Project plan: Project plan to implement GST.
• GST Business blueprint: Blueprint covering Tax codes and business scenarios
• GST Issue tracker: Tracks GST regulation, process and technical issues
• RMCD inquiry register: Tracks GST inquiries
• GST IT Blueprint: Blueprint covering the IT process landscape
• GST OCM: GST change management
• GST IT Landscape strategy: IT landscape covering interface to RMCD
• GST Testing strategy: Testing strategy and test coverage
• GST Master data management: Vendor and Material master maintenance
• GST RICEFW: GST related forms, reports and interfaces
• GST Training strategy: Training strategy covering all the stake holders

GST Implementation:

GST Implementation covers organization structure, master data and documents that is affected by the implementation of GST in the SAP system

Organization structure:

• Company code: Swisslog Malaysia has one active company code in SAP system and the company is located in Kuala Lumpur. The company is not located in Duty-Free Zone or Free Trade Zone or Super Economic Corridor.

•  Plant code: Swisslog Malaysia has one active plant code.

Master data:

• General Ledger: The GL accounts are activated and the standard chart of accounts (COA) is being used across the groups. 

• Customer master data: Around 250 active customer master records and ship to parties are maintained in SAP. There is no interface to/from for customer master records in SAP system. 

• Vendor master data: Around 250 active customer master records and ship to parties are maintained in SAP. There is no interface to/from for customer master records in SAP system. 

• Material master data: Approx. 10000 active materials are maintained in SAP. There is no interface to/from for customer master records in SAP system.

Business Process coverage:

GST on Sales and Purchases between Group companies.

• Import of Services.
• Bad Debt Relief
• Credit Memo / Debit Memo processing
• Rebate Processing
• Asset Disposal / sales
• Automatic Calculation of GST expected
• Customer Down Payment Processing
• Export Sales for Goods /Services.
• Free of Charge Sales
• AP & AR Down Payment
• Sales with Foreign Currency
• Third Party Processing.
• Subcontracting
• Employee benefits – Loans and Advances
• Travel claims and reimbursements

Documents:

The below list of documents are affected by GST:

• Purchase Order
• Sales order
• Billing document
• Accounts receivable – open item
• Accounts payable – open item
• External vendor invoice
• External customer invoice

Reports and Forms:

The below list of forms and reports are required for GST:

• FORM-03
• GST Audit File (GAF)

Requirement Insight:How to avoid software requirement chaos

Requirement challenges:

The biggest challenge in the software industry is collecting the requirements. Most of the requirements comes with one line. The customer himself might not be clear on the requirement. The delivery manager will have a lot of pressure to accept the requirement and to make sure the requirement is understood and the application is developed. The pressure percolates to the design and development team and at the end the schedule gets slipped, project cost is increased and poor quality in delivered.

Requirement collection:

Requirements has to be collected like a story writing.Based on the information provided by the  customer the story has to be developed. The story should have the sequences i.e. the business cases, should have a actors i.e. the roles played by each users, should have the screen plays i.e. for each roles the different types of events, should have a good looking i.e. the user interfaces must be very user friendly, characters should know the limitations i.e. constraints of the applications.

The collected requirements should be told as a story like how our Grandma's tell stories during our childhood days. By doing so the customer connects easily on the understanding of the requirement and confirms the understanding.

Requirement documentation:

Different tools are available to document the requirement. There should be a clear categorization of requirements and each requirements have to be documented with properly tagged along with meaningful numbers. This tagging will help to do a complete traceability so that at any given point of the time it can be traced back if it is missed in any of the phases during the project.

Last but not least requirement collection and requirement documentation is an art. The perfection will be achieved only by writing and practicing.

Cultural challenges in ERP rollouts

Change Management Challenges in ERP rollout:

Change management is a key area when it goes for ERP roll-out especially SAP roll-outs. The business organisation will be working totally in a legacy way and all of sudden if they want to move SAP then lots of resistance will be coming from the end user or key user community. How to overcome this challenge will be interesting. Below are some of the approaches which could give some results.

Approach:

Strong leadership qualities:

General human tendency is to resist if there is any change in the current practice. User community will put of pressure back to rollout team in non accepting the processes, not cooperating with rollout team to do testing and validating etc. Spread negative vibe to other regions and make life complicated for the rollout team.

Here the situation leadership qualities are very much required. Change manager must understand the dynamics of the situations and encourage the user community to get participate in the journey. There should be many awareness programs organised to make user community in understanding of the benefits of the new process and system. Regular campaigns to be organised to strengthen to connect to the user community. Wherever required the change manager must take strong decision for the benefit of the project.

Cultural understanding:

Cultural understanding is must as the team will be comprises of different region, language, countries etc. There should be a ice break sessions or project initiation and acceleration workshops to be organised. These workshops will be break the initial hiccups and makes the way for understanding of each other. This gives avenues for the rollout team on how to come with the strategy during the rollout period.

Winning the heart of key users:

Winning the heart of key users is possible if the rollout team really mingles with the user community. The approach must be applying so more soft skill approach. There should be a fine balancing required between the technical and soft skills.  

Challenges in Mass Transportation System

Background:

Most of the cities in India has grown in an unimaginable growth over the last 20 years. More or more peoples are migrating from rural areas to urban areas due to better job opportunity. and improved life style. Because of this there is lot of movement happening between the peoples.

Problem:

Challenge 1: Poor quality of roads

The quality of the roads are of poor quality due to which the vehicles has to move slow. An average a person has to waste 2 to 3 hrs average every day.

Challenge 2: Narrow roads

Because a sudden growth most of the arterial roads are narrow where as the vehicles are more. The ratio between the road capacity and vehicles is very high where traffic congestion is more/high.

Challenge 3: No driver discipline

There is a big cultural challenge with drivers. Lane discipline is not followed in many of the circumstances. This lead to lots of chaos in the roads.

Solutions:

The quality of the roads have to be increased. High quality standard to be set so that the contractor strictly follows the high standards. If there are any quality compromises then Govt must ensure that the standards are followed and practiced

There should be a good coordination across the different Govt. departments. This ensures loss in translation and gives better results.

Govt should implement good traffic management system to ensure smooth movements in the road. There should be a clear demarcation of medians, platforms and traffic signals for smooth movements.

Lane discipline should be followed as habit by everyone so that the accidents are avoided and human injuries or lives are saved.

Parking Chaos and Solutions In India

Background:

After opening up new economy policies in India in 1991 more or more investments started coming up in India which lead to change in the life style of middle class. More or more middle class were moved from middle class to upper middle class in the layer. The purchasing capacity has been increased for these so called upper middle and the passenger car sales between 1991 and 2015 has been increased by more than 100%. This is good for the country's economic growth on the other hand it had also created challenges in the areas of traffic congestion and parking congestion.

Problems:

The metropolitan cities Chennai, Delhi, Kolkatta, Mumbai, Bangalore and Hyderabad has a huge challenge in controlling and monitoring the traffic congestion and parking congestion due to the fact of narrow roads and in efficient traffic management system. This lead to an average of 1.5 to 2 hrs every day during peak hours (7:30 AM to 10:30 AM and 5:00 PM and 8:00 PM) one has to spend/waste time.

Most of the cities are not equipped with good parking system in place and they park the vehicles in the side of the road where they create a traffic congestion till it is parked. This has lead to lot of stress to both drivers as well the traffic police men.

Solutions:

To overcome the situations there should be an efficient parking system by involving sensors with good data analytic. The solution is that parking bay should be equipped with sensor which is integrated to the central system. When the vehicle is parked in/out in the bay the details are captured and stored in the system. This gives information to the central system on the availability. This information can be shared to a Mobile app or can be displayed in some of the hot spots where the drivers can find where the parking space is available.  

Case study: Using non moved materials from stocks in Warehouse using SAP mobile solution

Business Challenge:

Power tools division of Bosch India Limited has 17 warehouses across different regions in India. The back office is located in the Bangalore which is the headquarters for Power tools division.

The sales representatives from different regions collect the sales orders and book the orders in the system. The planning team sitting in the headquarters process these sales orders and place productions orders if stocks are not available. If the stocks are available then the sales team confirms the order and initiates outbound process.

The challenge was that in each warehouse there was a huge non moved material which is not used for delivery though sales orders are available in other region. For example there is a material X available in A warehouse in North region which has a shelf life period of 10 days and the same material is available in B warehouse in North region which has a shelf life period of 20 days. The sales order is for the customer located to B warehouse. If the material from A warehouse is not used as it has a less shelf life period compared to B warehouse then it may happen that the material in A warehouse might lead to scrap. This leads to huge inventory loss and cost.

The solution:

The non-movable material list has to be available to the warehouse managers in all the warehouses before they start planning for the delivery. Though details are available in ERP system the warehouse managers has to log on to SAP system to take decision.

The SAP mobile solution improved the situation by providing the information at any time, at anywhere where the warehouse managers takes decision at right time. This saves huge inventory costs.

Results:

With high competitive environment from the competitors and the target from the management to reduce inventory costs and to use the non-moved materials from warehouse the SAP mobile solution gives a real time information at any place, at any time, where the warehouse mangers takes decision quickly and reacts quickly.