KMG Chem­i­cals had a big prob­lem to solve. Its ship­ping costs were sky­rock­et­ing, yet the com­pa­ny had lit­tle choice in truck­ing car­ri­ers that were able to trans­port the ultra-pure chem­i­cals it makes for use in microchips. That’s where the IT team charged with man­ag­ing the ana­lyt­ics pro­gram came in to save the day with data.

Frikkie Koen, SAP solu­tion expert and project man­ag­er, cred­its the suc­cess of this project to a laser-like focus on solv­ing just one busi­ness chal­lenge — how to check trucks in and out more quick­ly from its plants. But he admits he and his team would not have devel­oped the right solu­tion with­out input from the employ­ees who work with the truck dri­vers every day. 

Frikkie and his team had great tools from SAP to work with, includ­ing SAP S/4HANA and SAP Cloud Plat­form as the glue bring­ing every­thing togeth­er through a ​“mashup” of data feeds — all unit­ed under one mobile app built with rapid user input. ASUG talked with Frikkie about how the app sig­nif­i­cant­ly reduced the company’s ship­ping costs, as well as some secrets to dri­ving users to adopt new technologies.

Ann Marie: What’s your approach to ana­lyt­ics at KMG Chemicals? 

Frikkie: We have a very clear, dis­tinc­tive line where IT stops and the busi­ness starts tak­ing own­er­ship. IT man­ages the tech­ni­cal com­po­nents, the envi­ron­ment, the secu­ri­ty, and the mod­el­ing. Our busi­ness own­ers are respon­si­ble for front-end sto­ry cre­ation and deployment.

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Ann Marie: What depart­ments have espe­cial­ly embraced your analytics?

Frikkie: Some in man­u­fac­tur­ing, qual­i­ty, and finance. Finance has real­ly embraced Microsoft Power­BI. They use it for what I call ​“quick and dirty analy­sis” of the data we ulti­mate­ly feed into SAP Cloud Plat­form. If they’re com­fort­able with Power­BI and they want to con­nect to the data mod­els that have been cer­ti­fied on our side, they’re more than wel­come to do that. We knew we were nev­er going to get them out of Microsoft Excel. Ulti­mate­ly, our job is to pro­vide data in a suc­cinct, accu­rate, struc­tured way. What­ev­er front-end tool our busi­ness com­mu­ni­ty feels more com­fort­able using, we’ll give them the choice.

Ann Marie: Tell me what you were look­ing to solve with this project.

Frikkie: Our busi­ness want­ed access to data as soon as it was avail­able on the vis­i­bil­i­ty of our trucks. When you ship haz­ardous chem­i­cals out of the mid­dle of Col­orado, you tend to not have a lot of choice of ship­pers, so you real­ly need to become a cus­tomer of choice. Our freight rates were sky­rock­et­ing. We real­ized there were some inter­nal process­es that we could fix, and to do that, we need­ed to add vis­i­bil­i­ty to those process­es. And the tool we would use to do this was our SAP system.

Ann Marie: Now it makes sense that your sup­ply chain folks are the most engaged.

Frikkie: They felt the biggest pain. I call it, ​“Dig­i­tize the con­straint.” We went after that to bring val­ue to the organization.

Ann Marie: Could you describe the solu­tion you built to address these issues? 

Frikkie: I explain it as a mashup of data from dif­fer­ent sources. We’ve got a trans­porta­tion man­age­ment sys­tem (TMS) where we ten­der our loads that has infor­ma­tion about appoint­ments. Then there’s the SAP S/4HANA data, which our trans­porta­tion plan­ners use to sched­ule trucks. Then there’s the activ­i­ty that hap­pens in the plant when the trucks arrive. What are we load­ing on it? Do the truck dri­vers have all the infor­ma­tion they need? Have we checked that they’ve got their haz­mat certificates? 

We’ve got SAP Cloud Plat­form act­ing as a side­car, where our ana­lyt­ics are mashed up with data across mul­ti­ple work streams com­ing from mul­ti­ple sources. The app itself that we’ve built with­in SAP pro­vides some of the data, which only resides in SAP Cloud Platform.

Then we join that with the real-time infor­ma­tion relat­ed to the truck appoint­ments made by our trans­porta­tion plan­ner. We’ve basi­cal­ly built a sys­tem to col­lect real-time feed­back on the truck load­ing sta­tus­es. At the end of the day, when we turn trucks around quick­er, we become a ship­per of choice and we save money. 

Ann Marie: What fea­tures of SAP Cloud Plat­form do you find most valuable?

Frikkie: You know how it works in IT — every­body freaks out when you’re going to touch the ERP sys­tem. But now that we can make changes direct­ly in SAP Cloud Plat­form, you’ve got what I would call a plat­form for inno­va­tion. I can get the kind of rapid results I want with­out think­ing that I may screw up my ERP sys­tem. I’ve got noth­ing against SAP S/4HANA — it’s great. But for us, the real val­ue in our trans­for­ma­tion is hap­pen­ing through the func­tion­al­i­ty in SAP Cloud Platform.

Ann Marie: Based on what we’re hear­ing from cus­tomers, SAP S/4HANA isn’t ​“the big thing,” it’s the ​“thing before the big thing.” You need to have your plans mapped out to know what areas you want to get val­ue from.

Frikkie: I agree 100%. And we found that SAP Cloud Plat­form was where we got val­ue by show­ing quick wins to the busi­ness with­out heavy invest­ments. Our strat­e­gy is to build that capa­bil­i­ty and then expand the SAP S/4HANA piece. The big­ger trans­for­ma­tion is just the cher­ry on the top.

Ann Marie: How does the mobile app fit in and what val­ue is it bringing?

Frikkie: The mobile app we devel­oped focus­es on two areas: check­ing in trucks and sched­ul­ing appoint­ments with our truck dri­vers as they arrive at our facil­i­ties. The app allowed us to move all paper out of our ship­ping office. Now, the dri­vers can come in with an appoint­ment ID or a ship­ment num­ber. Our folks in our ship­ping depart­ment can type that in and it brings up all the detail around what­ev­er the dri­ver needs.

In the past, our users had to fill out a bunch of papers. Now we’ve got all of that stored inside our mobile app. When the dri­vers sit at your dock, they’re not get­ting paid, right? That’s the bot­tom line. They don’t care how nice your show­ers are or if you’ve got a vend­ing machine. They just want you to turn them around and get them off the dock so they can make money.

Ann Marie: The app prob­a­bly gives you some great data to ana­lyze, too. 

Frikkie: We real­ized all the stuff that’s with­in our con­trol. The dri­vers are mak­ing appoint­ments so we can now see, are they arriv­ing on time? How long does it take us to load their trucks? Are there spe­cif­ic car­ri­ers that we’ve got more issues with than oth­ers? Is it any­thing to do with their dis­patch depart­ments? Our mobile app has now allowed us to record what our folks in our ship­ping depart­ment do, from check-in to check-out and load­ing of these trucks. We now have that infor­ma­tion to make some informed deci­sions. We get the val­ue from SAP S/4HANA and our part­ners to cre­ate, basi­cal­ly, a live view of our load­ing activities.

Ann Marie: Did you expe­ri­ence any change man­age­ment issues when you switched to the mobile app?

Frikkie: We absolute­ly did, but here’s the great part: Because we part­nered with our sup­ply chain orga­ni­za­tion, we brought them along. When we built the app, we had the folks in the ship­ping depart­ment giv­ing feed­back. From a car­ri­er per­spec­tive, they told us, ​“We’ve been wait­ing for you to show up for the 21^st century.”

One of our lessons learned is that we had to stay away from try­ing to do every­thing for every­body. Instead we focused on the spe­cif­ic con­straint and the change man­age­ment relat­ed to the app project so that there could be a direct cor­re­la­tion to the results of what we were build­ing. We lis­tened to our end users and built what they need­ed to make their lives eas­i­er. Some­times we think we have to build a space­ship when the user is just look­ing for a car.

Ann Marie: What cri­te­ria did you use on your end to sort out the most crit­i­cal feed­back ver­sus the ideas that were more appro­pri­ate for a lat­er devel­op­ment phase?

Frikkie: That is a fan­tas­tic ques­tion. We need­ed to cor­re­late the user’s sug­ges­tion specif­i­cal­ly to that prob­lem which, ulti­mate­ly, for us, was turn­ing trucks around quick­er, which saves costs, which gets dri­vers off our docks faster. If their feed­back would result in a quick­er turn­around and we could devel­op it in 24 hours or less, it got includ­ed. If it didn’t make a dif­fer­ence, we told our users, ​“Hey, we hear you. We thank you for the feed­back. But this isn’t going to help you to turn a truck around quicker.”

Ann Marie: Do you have any spe­cif­ic ROI that you can share? 

Frikkie: I can tell you that we saved more than six fig­ures on freight costs with­in one year. This project paid for itself over and over, prob­a­bly with­in the first month. It paid for itself because we kept focused, right? And that’s the key because this could have turned into a six-head­ed mon­ster if we allowed it to. But instead we part­nered with the busi­ness. I always say, ​“My job is to enable your process. You know what your process is far bet­ter than I do.” 

Ann Marie: If you had to sum it up, what do you think are the secrets to gain­ing user acceptance?

Frikkie: Num­ber one is user-dri­ven require­ments. Num­ber two is a small, focused solu­tion. Num­ber three is to dig­i­tize a spe­cif­ic con­straint. Do not try and solve every­thing. It’s not going to work. You have to have quick turn­arounds. And lis­ten to your users. If you solve pain points, you’ll get prod­uct evan­ge­lists inside of your orga­ni­za­tion who will see the val­ue of what you’re doing. 

Times have changed. We should no longer try and build some­thing and force it onto users. It just doesn’t work. When peo­ple tell me, ​“Well, folks on the shop floor don’t under­stand tech­nol­o­gy,” I say, ​“Lis­ten, everybody’s got a smart­phone so please don’t tell me that.” That’s just igno­rance. Every­one wants to do stuff bet­ter and faster to make their lives eas­i­er. Our job is to pro­vide the tools to do that. Get peo­ple involved and make them cham­pi­ons of their own change.

Ann Marie: I’m hap­py to hear about your suc­cess­es, Frikkie, and I think that oth­ers have a lot to learn from this mod­el. Thanks for shar­ing your story.

Don’t miss your oppor­tu­ni­ty to hear about trends in the indus­try from oth­er chem­i­cals cus­tomers at our vir­tu­al expe­ri­ence ASUG Best Prac­tices: SAP for Indus­tries in Sep­tem­ber 2020.