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.
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 21st 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.
If you’re looking to learn how your peers are doing more with business intelligence and analytics, you should join us at the BI+Analytics Conference in Atlanta, Georgia, March 9–11, 2020.