SAP Technology Adoption Leads to Shorter Delivery Times, Reduces Inventory Costs
Client: High Technology Company
A competitor was threatening a high technology company’s survival. The high technology company delivered products to its customers worldwide in thirteen weeks from the time an order was placed. The competitor could provide an equivalent product anywhere in the world in just six weeks. Many customers were switching to the competitor because of the better delivery time.
The company’s leadership decided that the best way to reduce delivery time was to put its product inventory closer to customers by decentralizing from six warehouses to hundreds of local storage sites, including sites within customers’ manufacturing facilities. Managing decentralized inventory was significantly more challenging then managing just the six warehouses.
Challenge: Master new technology and new way of interacting with customers
The leadership team further decided that the best way to drive this change was to implement a version of SAP that was based on decentralized storage. The leadership team mandated that the 400 Customer Business Analysts (CBA) who took orders from customers and worked with manufacturing to stock the warehouses had to switch from a well-established system of spreadsheets used to manage the centralized inventory to the new SAP. In order to use this version of SAP, the CBAs had to master a completely new technology that forced them to interact differently with their customers, manufacturing and the logistics groups – and this version of SAP didn’t work very well.
There was widespread resistance from both customers and the CBAs to using SAP. CBA turnover hit 40% per year. But some CBAs adopted SAP quickly and started to show significant improvements in inventory costs and customer response times.
Defining and implementing best practices
The company selected Cerebyte as the methodology and technology to define and implement the best practices for how to best use SAP to manage decentralized inventory.
Building Best Practices for Optimizing the Use of SAP
- They conducted three, 2.5 hour Sofia Facilitated Wisdom Discoveries with experts in different locations – an SAP CBA expert in the UK, an SAP IT developer in Santa Clara, CA and a CBA team leader from Hong Kong – on how to optimize CBA use of SAP. The Project Manager, based in Folsom, CA, led a “Consolidation Workshop” in which the three experts merged their work to create an “authorized best practice” how to CBAs should use SAP to minimize delivery times through great decentralized inventory management.
- Although the original plan was to rely completely on Sofia self-directed learning, the CBA leadership team thought that the content was so valuable – and engagement by the CBA managers so important -- that they decided to use the CBA managers as Observer/Coaches. The CBA Observer Coaches were trained in four, two hour webinars – one for each geographical region -- using the Sofia Observer/Coach program.
- A series of 1.5 hour Launch Webinars – timed for each region, hosted from Folsom, CA and co-led by Cerebyte and the local CBA Observer/Coaches – launched the program for all 400 CBAs. These webinars introduced the optimum way to use SAP to reduce delivery time through decentralized inventory -- and the related changes to customer interaction and business processes. The facilitation of the webinars was done in English and the discussions of participants in the webinars was in local language.
- Participants did one practical Actions per week (e.g. practicing building a better forecasting relationship with a customer), requiring about 30 minutes per week for about 4 months. Through these Actions, the CBAs learned how to be a great at using SAP to manage decentralize inventory.
- The CBAs and their managers met 1 hour biweekly to discuss both what they learned from the Actions and how they could better manage the inventory. The meeting were held in local language
Successful program leads to long term results
- Delivery times dropped to six weeks, cancelling the competitor’s advantage
- Inventory costs dropped $50M per year
- CBA turnover dropped to 4%.
The European Director of CBA Operations stated that this program: “Changed the entire atmosphere of the group. People felt great about the empowerment provided through the program. Most importantly they came to see SAP as an enabler rather than a burden.”
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