SAP customer panel lets competitors collaborate for mutual benefit
“Business today is all about managing complexity. Supply chain excellence is not an option.” That statement from Tom Miller, VP of bottling investments, The Coca-Cola Company, sums up why executives with 33 companies that potentially compete for the same customers convene on a regular basis to share tips for improving supply chain performance.
“Business today is all about managing complexity. Supply chain excellence is not an option.”
That statement from Tom Miller, VP of bottling investments, The Coca-Cola Company, sums up why executives with 33 companies that potentially compete for the same customers convene on a regular basis to share tips for improving supply chain performance.
These companies—which include household names such as e Coca-Cola, Kraft Foods, Procter & Gamble, and Johnson & Johnson—make up the SAP Consumer Packaged Goods Customer Advisory Panel, or CPCAC.
The group is one of 24 industry panels organized by enterprise software market leader SAP. “The CPAC is a driving force in shaping SAP’s product direction,” says Emeil van Schaik, SAP’s senior VP of manufacturing and consumer industries solutions. “Eighty percent of the work this group does has a direct impact on the SAP product portfolio.”
With customers having that type of influence on its product direction, it can be assumed that SAP is developing solutions that are well received in the marketplace.
But how do CPAC members benefit from participating in the group, particularly when it requires sharing details about how they use SAP’s software to support business processes?
In late September, a small group of trade journalists was invited to Coca-Cola headquarters in Atlanta to discuss that question with members of the CPAC steering committee.
In addition to SAP’s van Schaik and Miller of Coca-Cola, CPAC members at the meeting were Mark Dajani, senior VP and CIO, Kraft Foods and Brian Nicolas, group head of business operations development, SABMiller, PLC, a global beer producer.
“We do talk more about business and business processes than software,” Coca-Cola’s Miller said of the CPAC meetings. “The value comes from learning from people who already have done some things that you may be trying to do. That’s why we’re willing to work with our competitors.”
Dajani, the Kraft Foods CIO, said there’s no reason to worry about sharing information with group members—even direct competitors—because each company uses the information acquired in the meetings differently. “The idea is to take the best practices and see who executes them best,” Dajani said. “The differentiation is in the corporate culture . . . getting your organization to be the best at executing the best business processes.”
As each committee member outlined his experience on the panel it became apparent that even though the CPAC’s work centers on uncovering solutions to common industry problems, the individual companies represented on the panel do indeed use this information for different purposes.
For instance, a major issue for all consumer goods companies is how to build a closer bond with consumers. The ultimate goal is gaining a better understanding of what types of products customers want, and how they want to receive them.
Hashing out this topic at CPAC meetings led to the conclusion that SAP should beef up the front office portion of its software suite.
“The initial discussions started with a white space analysis—looking at the gaps in the SAP product portfolio,” recalls SABMiller’s Nicholas. “We saw glaring omissions in trade promotions management and CRM functionality.”
When SAP addressed those issues, CPAC members found different ways of applying the new functionality to their own businesses.
For SABMiller, the new functionality helped improved its ability to execute direct store delivery, which is a crucial element of how SABMiller serves customers in Latin America.
“In Columbia, we do direct delivery to 400,000 customers,” Nicholas said. “So we need good direct store delivery support.” After testing SAP’s new functionality with selected customers, Nicholas said, “Now, we’re looking at large-scale roll out across the country.”
Coke used SAP’s improved CRM and supply chain functionality to improve its demand management processes. “Recognizing the need for cost control and improved customer service highlighted the need for improved demand management,” Coke’s Miller said. In addition to CRM functionality that allows for collecting better customer data, Miller said, SAP supply chain solution now have “special algorithms that enable dynamic sales & operations planning.” The end result, he said, is “an increased hit rate” when Coke decides which products to send in individual markets.
Kraft Foods has benefited from SAP’s improved promotions management capabilities, but Dajani said that’s not all the company has gained from participating in CPAC. “What we’ve done here is break the cycle of looking for software to solve immediate problems,” Dajani said. “We’re now looking two years out with SAP and exploring how the software might solve problems we see coming in the future.”