Is your SAP SCM Just in Time? Part I

by | May 17, 2016


Is your SAP SCM Just in Time? Part I

Your supply chain is the heartbeat of your business. A missing package or delayed shipment costs your company.

Make your Supply Chain Management agile
Make your Supply Chain Management agile with Panaya for SCM

Lean production, pioneered by Toyota, has won. In today’s instant real-time era, customers expect on-time and just-in-time inventory management (JIT). The days of large inventory stockpiles and tolerance for long delays are over.

The cost of excess inventory is huge.

Today, all of your business – including your Supply Chain Management (SCM) — needs to be agile.  However, your ERP systems, particularly your SCM applications, may be holding you back.

Are your SCM systems keeping up with your business?

The Challenge of Digital Disruption

Organizations that want to stay relevant must ensure their supply chain management system offer real time, responsive, and customer-centric processes and analytics.

For many SAP users, this means upgrading both their ERP and SCM to the latest EHP version to stay in-synch. This way, the supply chain management functions can take advantage of the latest and greatest that SAP offers.

Are You Accruing Technical Debt?

Falling behind SAP support and enhancement packs increases the risks of upgrade. Many organizations worry about the risk and cost of upgrading, but too few consider the costs of falling behind.

Putting off updates increases technical debt. Ward Cunningham, one of the signers of the Agile Manifesto and a pioneer of agile software development, defines technical debt as the cumulative consequences of cutting corners throughout a software project’s design and implementation. Like financial debt, it is dangerous to your business.

According to a recent article in Management Sciences, “Enterprise systems laden with high levels of technical debt are not only prone to failures, but also create hindrances for the successful execution of business strategies.”

IT departments beginning a SCM upgrade are faced with challenges that can delay a change project and increase technical debt. These challenges include:

  • Difficulty in project management – inability to estimate.
  • Lack of visibility of what’s going to break. Problems are only identified late – even post go-live.
  • Poor test management – difficulty in monitoring testing processes, reusing tests, and ensuring that they are testing the high-impact areas

The Risk of Not Taking Risks

Organizations often fall behind because they are afraid of change. It’s better not to change something – the risk-free option – rather than risk their jobs and their systems by taking a chance. This has worked well for large organizations for a long time. Being conservative has become the norm.

However, it doesn’t work anymore in today’s era of digital disruption.

Great companies fail due to their inability to respond to change. Today, organizations need to be confident that they can make changes and take risks. Otherwise, they will end up defunct like the thousands of businesses that have closed up shop in the past decade. No one wants to be the next Circuit City, Woolworths, or F.A.O. Schwarz.

However, now organizations can accelerate inventory management and make SCM changes, reducing project time with the just-announced Panaya CloudQuality™ Suite for SAP SCM.

Want to know more about how your SCM organization can embrace enterprise agility? We’ll reveal the rest in our next blog post.

While you’re waiting, discover how to keep your SCM application Agile with Panaya.

I Want Risk-Free Change