Continuous Performance Improvement: Closing the Loop Between Strategy and Operations

Learn how SAP solutions allow you to evaluate strategy and risk, review supply chain performance, analyse profitability, and plan and execute improvements.

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    • Continuous performance improvement: Closing the loop between strategy and operations. This demonstration shows how SAP solutions allow you to: evaluate strategy and risk, review supply chain performance, analyze profitability, and plan and execute improvements. Evaluate strategy and risk. Khar Darwin is the COO at Global Corporation. Khar uses the scorecard in the SAP BusinessObjects Strategy Management application to review his strategy. He’s concerned that some key objectives are dark red indicating poor performance. Khar asks Steven Richter to investigate the product quality objective. Steven heads manufacturing operations at Global. On his personalized home page he sees that the objectives and key performance indicators – or KPIs – are dark red. Steven drills down to see more details on the percentage of warranty returns. Analyzing the data by supplier dimension, he sees that components received from two suppliers don’t meet the required standards, but two other suppliers consistently exceed targets. Steven wonders if there are any risks to Global consolidating purchases with these vendors. He asks John Smith, a risk manager at Global, to look into this. John reviews a heat map in the SAP BusinessObjects Risk Management application that shows all related risks across the business units. He sees that product recall is a major risk, so he clicks the link to investigate further. John sees that two mitigating responses have been established to address the risk of product recall. One is to conduct more frequent audits; the other is to qualify preferred vendors. Review supply chain performance. Nancy DaSilva is a supply chain manager at Global. She uses the SAP BusinessObjects Supply Chain Performance Management application to do her job. At Khar’s request, Nancy investigates the delivery performance issue. She notes that delivery performance is influenced by perfect order fulfillment at line item level. This KPI is red and trending down. Nancy drills down at every level of the hierarchy to better understand the root cause of this problem. She concludes that Global does not consistently meet delivery dates. Nancy captures her analysis to present at the upcoming strategy meeting. Analyze profitability Peter Schultz is a finance manager at Global. He uses the SAP BusinessObjects Profitability and Cost Management application to review company finances. Global wants to rely more on small distributors to grow the business and improve profitability. Peter notes that net margin is below targets in both actual revenue and percentage. He sees the small resellers segment has the worst performance. And he notes that distribution costs for small resellers are too high, resulting in low net margins. Analyzing further, he sees that small- and medium-sized orders are driving up distribution costs. Peter performs a simulation revealing that increased order size will substantially decrease distribution costs thereby improving net margins. Resulting lost sales can be offset by a 12% discount. Peter decides to capture his analysis to present it at the upcoming strategy meeting. Plan and execute improvements. Khar wants to review Global’s performance and initiate improvements. His team of objective owners uses SAP BusinessObjects Strategy Management to share their findings in a presentation. Global executives approve the team’s recommendations and enter new strategic initiatives using the application. And, they decide to launch a Six Sigma project. David Ada
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