Real Time Supply Chain Management by SAP & SmartOps

Companies around the world are facing issues with growing logistics complexity. An appropriate solution for this environment would involve continuous work on the Sales and Operations plans, which consider demand and efficient supply of products while considering the revenue and profitability in real time. The center of Sales and Operations plan is to ensure highest customer satisfaction and least inventory levels by reducing demand uncertainty, improving predictability and increasing short term forecast accuracy.  

Recently SAP announced plans to acquire SmartOps, a provider of inventory and service-level optimization software solutions. This will allow SAP to integrate the software expertise into their existing platforms such as SAP HANA and SAP APO, and provide customers with the ability to run their business in real time – a problem being addressed by increasing number of companies. SmartOps has developed large-scale, algorithms that take the uncertainty and risk out SCM processes by using predictive analytics.

Key benefits that will be available to customers with this acquisition:

• Coordinate capacity, inventory, demand, lead time, and product availability variables
• Enable planners to set and manage targets such as safety stocks more frequently at a granular level
• Help customers realize savings from improved customer service levels and lower inventory
• Accurately track and streamline inventory positions throughout an order-to-cash value chain
• Increase sales by determining optimal inventory targets
• Enhance risk management through prescriptive strategic analysis capabilities
• Free working capital by balancing service levels and inventory investment
• Achieve rapid ROI

This deal by SAP is similar to the Ariba acquisition last year, which gave SAP a wide variety of SCM and e-commerce capabilities. I am sure these deals make sense interms of business strategy, but do they add any significant SCM capabilities to SAP’s portfolio or are they for defensive purposes? Do they solve problems faced by companies around the world? A better conclusion can be drawn upon once SAP customers start using the new services.

1. http://www.supplychainmarket.com/doc.mvc/sap-smartops-optimize-inventory-service-levels-supply-chain-0001?atc~c=771+s=773+r=001+l=a
2. http://www54.sap.com/lob/scm/software/inventory-management/index.html
3. http://www.cio.com/article/729354/SAP_Adds_to_Supply_chain_Tech_with_Smartops_Acquisition