SAP S/4HANA To Support Supply Chain Modernization at CBS

SAP S/4HANA To Support Supply Chain Modernization at CBS

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by Brianna Shipley, Director of Editorial, SAPinsider

At a Glance

  • SAP supports Canadian Blood Services’ shift to online experience for donors and hospitals
  • Supply chain modernization journey helps build the business case for SAP S/4HANA
  • Continuous innovation in short bursts improves donor engagement from 5% to 80%

At Canadian Blood Services (CBS), Canada’s national blood operator, improving user experience and undergoing a supply chain modernization journey to prepare for SAP S/4HANA are driving its life-saving services.

CBS’ main line of business collects blood and processes it into blood products. These are then shipped to hospitals and used to support medical care like major surgeries, medical procedures, cancer treatments, and managing diseases and disorders. Other areas of the business include organ and stem cell registries, and a cord blood bank, which is used for stem cell transplantation to help patients who have undergone chemotherapy regenerate their immune systems. Last but not least is CBS’ plasma operations, responsible for developing life-saving therapies and treatments made from plasma-derived protein products.

CBS’ Chief Information Officer (CIO) Ralph Michaelis heads up the organization’s enterprise IT group. He says that a combination of changing customer and employee expectations and an increased need for digital engagement in the healthcare industry and business agility has acted as a catalyst for CBS’ SAP S/4HANA business case. Shifting its interactions with hospitals and donors to an online experience and improving the overall user experience for all of its stakeholders — including its employees — is informing digital transformation across the organization.

Digital Engagement Supports a Healthy Community

Increasing donor recruitment through digital channels and achieving vendor-managed inventory for its hospital customers are the desired business outcomes inspiring CBS’ latest innovations.

Digital engagement capabilities became much more important for connecting with donors during the pandemic, says Michaelis, as walk-in appointments were eliminated. CBS developed a mobile application that connects with its infrastructure in real-time — including SAP Customer Relationship Management, which houses CBS’s donor interactions. This connection increases visibility into appointment slots and ultimately connects the registrations to CBS’ manufacturing execution system.
“We wanted to make it as easy as possible for users to connect with CBS. The original portal was not very user-friendly because the first thing it hit you with was, tell us what your username and password is so we can authenticate you,” Michaelis says. “We changed that dynamic through the mobile app to say, where can I donate blood in my area and is there an appointment time that is convenient for me?”

Focusing in on its hospital cohort, Michaelis says that CBS wants to make SAP S/4HANA the central point for managing the inventory and the ordering of its products. The company has started to prepare its core business processes for SAP S/4HANA, including automating its supply chain processes.
CBS needs to make sure that it can integrate its SAP ECC instance — which currently manages parts of the organization’s supply chain processes — with its manufacturing execution system.

“We want to be able to let our hospitals place an order, track that order, and understand what the inventory levels are in real time. Through the pandemic we saw a dip in hospital orders because elective surgeries basically got canceled and postponed, but now that things are starting to come back, we want to make sure that we’re prepared to serve that dynamic for our hospitals,” Michaelis says.
One specific key performance indicator (KPI) noted by Michaelis is to become more agile and dynamic in collections planning and inventory management for plasma-protein-driven products. “We collect about 800,000 units of blood and we do that through about 1.2 million appointments every year. It’s a large volume,” Michaelis says.
CBS was able to increase the frequency of its collections planning to be done on a quarterly basis, rather than annually. Michaelis says the next goal is to conduct planning every few weeks.

Innovation in Short Bursts

Digital donor engagement has improved from 5% to 80%, says Michaelis. He refers to the results as “not a boom but a game of inches,” explaining that continuous innovation in bursts happened over a five-year span. “If your horizon for delivery is too long, you risk the context of that project changing within that timeframe.”
Developing a product mindset — versus a project mindset — was essential. “We were looking for that type of skill that is interested in not just completing a project but caring about, how does the business and our customers win? Installing and activating the project in a cyclical manner allowed for innovation and adjustment along the way.”

CBS studied its donor experience using data and analytics to understand what was working and what wasn’t. In addition to data and analytics skills, ABAP, functional and business process skills, and UI experience enable CBS’ experience teams. “We need to continue to meld the intersection of business and technology acumen in order to fundamentally re-engineer business processes and achieve outcomes in weeks as opposed to months.”

Co-creating with the Business

CBS needs to “cross technology boundaries” to deliver an exceptional user experience, says Michaelis. He has reorganized his teams, creating internal and external customer experience teams, with the SAP team providing support across the two. Donor experience, for example, is managed by the external customer team, and business functions like finance and supply chain are managed by the internal customer team. Michaelis also has a strategy and governance team and traditional infrastructure and operations teams.

“By changing that dynamic, we’re focusing much more on the business and how the business wants to evolve and how we co-create with the business. And so rather than pushing, here’s an SAP solution, it’s really about how do we leverage the SAP platform to deliver the best business process, the best customer experience, whether it be an internal customer or an external customer.”

Michaelis isn’t taking a single approach to infusing skillsets into his teams. “It’s really about how do we upskill our existing staff and shift their perspective to do things in a different manner? We’re also finding that we do need to hire some of these skills in and complement newer skills and ideas with a seasoned workforce.”
Michaelis is also relying on strategic sourcing to “get the best bang-for-the-buck combination.”

What Does This Mean for SAPinsiders

Invest in user experience. Digital is here to stay. Whether it’s internal business customers or roles in finance or supply chain, delivering exceptional user experience is a strategic investment that should not be overlooked today. “If you couple those interactions with design thinking to really optimize business process, that will help a great deal,” Michaelis says.

Identify the right areas in your business where you can color outside of the lines. The safe things are easy to work with, says Michaelis. “The challenge is how do you start to push the envelope, do something different, innovate, and find the people who are willing to come along with you on that journey?” When it comes to identify the right areas for innovation, focus on taking risks where the most significant business outcomes are possible. “You need to make sure that you’re relevant to the business. It’s about collaboration and co-creation,” Michaelis says.

Consider other perspectives. Talk to people outside of your organization about technology evolution and the transition to digital. Michaelis recommends that companies network and understand how their experience and performance compares to other businesses. “Trade war and horror stories,” he says, “and also success stories.”

Meet the Executive

Ralph Michaelis IMAGE

Ralph is the chief information officer of Canadian Blood Services. He provides leadership and direction to the information technology (IT) division. IT is a critical enabler for Canadian Blood Services, supporting the safe and efficient delivery of biological products and related services while facilitating the organization’s shift into a digital business. Ralph is responsible for ensuring IT aligns with and enables business operations and strategy.

Ralph joined Canadian Blood Services in June 2012. He has extensive technology and business experience in both the private and public sectors, ranging from high tech to higher education. Before joining Canadian Blood Services, Ralph was the chief information officer at Carleton University for 10 years. He has also held a variety of senior business roles at Newbridge/Alcatel and has experience in technology development in research and development at Mitel Corporation.

Ralph holds a bachelor’s degree in electrical engineering from the University of Windsor and a master’s degree in business administration from the University of Ottawa. He is a registered professional engineer in the province of Ontario.

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