Darcy MacClaren is a strategic global leader who has spent 30 years growing, differentiating, and improving businesses through technology transformation with a focus on supply chain. She has held various leadership roles at SAP over the last ten years and currently serves as the Chief Revenue Officer, SAP Digital Supply Chain. With an emphasis on customer success, Darcy is responsible for driving Digital Supply Chain sales, including the go-to-market strategy as well as overseeing core operations in pipeline development, demand management, and revenue growth. Darcy is committed to guiding organizations in their digital transformation journey through innovative technology and next generation business processes. She is passionate about collaborating with and empowering companies to elevate the strategic value delivered to their ecosystem. Her central focus is to help companies build resilient, agile, and sustainable supply chains. Most recently named one of Supply & Demand Chain Executive's Women in Supply Chain for 2022, Darcy is also a 2022 Supply Chain Pro to Know and frequent contributor to The Washington Post, Protocol, WSJ, Bloomberg Radio, and other supply chain venues. She is the founder of the Women in Supply Chain Network which is dedicated to improving diversity in the supply chain field and since its inception in 2020, has grown to over 500 members. This year, she was awarded the Diversity and Inclusion Award from SAP for her work with the Women in Supply Chain Network. Darcy recently sat down with SAPinsider Chief Content Officer Mark Vigoroso to share her thoughts on supply chain technology, transformation, and innovation. Mark: I’ve heard you state that disruption is the new normal in supply chains. How does SAP's Digital Supply Chain portfolio help companies anticipate and manage these disruptions and, ultimately, become more resilient? Darcy: The essence of our approach combines insights from the Oxford Economics research study with our strategic vision. We've learned that a supply chain must be central to business strategy, rather than an afterthought, and integrated into the core of operations. It's crucial to consider risk-proofing as part of this integration due to potential disruptions. This involves identifying critical elements such as key contract manufacturers, essential raw materials, significant global regions, and pivotal customers. From a risk perspective, it's important to identify and protect these key components. Collaboration is key, both within the organization and externally, along with leveraging intelligent technology. SAP addresses this through our integrated business planning and synchronized planning concept. This allows for a strategic overview of the entire supply chain, identifying various areas for attention. We've integrated this planning with platforms like Cosmotech and Everstream, which provide real-time information on supply chain risks, including environmental and geopolitical factors. This integration helps in setting up effective sales and operation planning, allowing for scenario planning that is customer-centric, cost-effective, and sustainable. We're moving towards probabilistic planning within our Integrated Business Planning (IBP) solution, acknowledging that traditional single-number forecasts are often inaccurate. Probabilistic planning offers a range of outcomes, providing a buffer for uncertainties. Another aspect of SAP's solutions is the concept of networks, connecting logistics service providers, suppliers, and contingent workers. This connectivity enables quick responses to issues with logistics service providers, enhancing flexibility. Interoperability is also crucial, particularly the real-time integration of SAP's supply chain products, including SAP S/4HANA, ECC, and others. The ability to contextualize data is a key differentiator, allowing for immediate action on significant changes, such as order modifications or manufacturing challenges. Mark: I've heard you and others discuss the “three Cs” in SAP's supply chain strategy. Could you briefly explain what these three Cs are? Darcy: Firstly, it's essential for our business processes to be fully connected, a concept we refer to as interoperability. This involves examining our business processes from start to finish to ensure they are seamlessly integrated. This process encompasses everything from designing and formulating processes to connecting them with planning and scheduling activities. The goal is to ensure everything operates smoothly and bi-directionally with manufacturing, guaranteeing efficient and sustainable product manufacturing. Effective communication with the logistics sector is also crucial, enabling efficient warehousing, storage, and transportation of products. This interconnectedness is vital for recognizing issues like machine malfunctions, which could lead to delayed orders or necessitate changes in operational metrics or staff training. This level of connectedness enables the creation of a 'digital twin', allowing for extensive simulation and analysis. Without this interconnected framework, such simulations would be impossible. Next, we focus on the contextual aspect of data. It's not just about collecting data points; it's about understanding their significance and acting accordingly. For instance, in transportation, a delay of a few minutes might be inconsequential, but a 30-minute delay is critical information. It's about distinguishing valuable data from mere noise and communicating relevant information to all stakeholders. Moreover, as we collect millions more data points, the third key aspect, collaboration, becomes increasingly important. Collaboration extends beyond internal operations, urging us to break down silos within the organization. This approach is crucial for leveraging AI effectively. We need to move past isolated thinking, where departments like transportation or demand planning operate independently. The objective is to foster collaboration across all departments and with external partners like suppliers, contributing to a more cohesive supply chain. An interesting example of this is the collaboration within the German automotive industry during the COVID-19 pandemic. Faced with a severe shortage of integrated circuits, these companies formed a consortium to address this industry-wide supply chain issue. Despite their competitive nature, they maintained company confidentiality while collaborating to strengthen their industry collectively. In summary, the underlying theme in designing SAP's digital supply chain products is to ensure they are connected, contextual, and collaborative. Mark: You mentioned something at the recent Mastering SAP event that I found eye-opening: supply chain leaders are also leaders in sustainability. Could you elaborate on why this is the case? Darcy: Yes, this information is derived from an Oxford economic study. The statistics show some variation, but they indicate that between 72% and 76% of a company's carbon footprint is controlled by its supply chain. This highlights the critical importance for supply chain practitioners to be aware and proactive in this area. Interestingly, sustainability is now more than just a tagline on a mission statement. It's becoming increasingly significant to customers, a statutory requirement, and a factor in where employees choose to work. This shift is directly impacting the bottom line. Supply chain executives who understand and embrace these concepts are the ones leading the way. They recognize that focusing on sustainability can be financially viable. For the first time, we're seeing sustainability directly contribute to the bottom line. Executives now have the tools to analyze and modify their operations, such as manufacturing processes, to be more fuel-efficient. This approach can lead to savings in packaging, transportation, and overall energy consumption. Moreover, supply chain optimization involves understanding product needs, distribution, and quantities, reducing waste at every stage. This comprehensive approach to improvement is why supply chain leaders are becoming synonymous with sustainability leaders. Given the increasing prominence of supply chain and sustainability, these roles are now elevated to top executive levels, often within the C-Suite. I recently attended a conference in Washington D.C., where the focus was on supply chain and sustainability. We discussed the legislation the U.S. government is drafting to protect the country from supply chain risks and to promote sustainability. There's a growing recognition that the industry's input is vital in these discussions, which is a significant step forward. Mark: Is SAP committing to specific time-to-value targets for their customers in the context of supply chain transformation? Is SAP actively promising tangible supply chain improvements, setting measurable goals, and providing a clear timeline for these results? Darcy: The concept of gain sharing has been around for a while, and it's quite fascinating. If we were to implement it, it would have to make sense for our organization. However, the challenge lies in committing to specific organizational benefits while maintaining control. At SAP, as you might know, we employ value engineers who project anticipated savings for our clients. This involves leveraging our extensive database, which is the largest in the world, to provide benchmarks and identify areas for improvement. We present a comprehensive analysis of expected improvements, but we don't commit to them because clients have significant control over their processes. We assist with data management and offer guidance, and this is part of SAP's transformation into what we call the 'customer value journey'. Our customer success team focuses on tracking customer progress from onboarding to realizing benefits. We've become quite sophisticated in monitoring the value delivered versus the value projected. When there's a discrepancy in value realization, we often find that it's related to change management. Our consultants, therefore, work closely with clients to address these issues. For example, using Signavio, we can track whether employees are following prescribed processes. Moreover, consulting firms like McKinsey also play a role by providing recommendations. However, for a company to commit to the results proposed by such consultants, they need to have complete control over the implementation and execution processes. The potential benefits of these services are significant. Yet, it's not feasible for SAP, or most software companies, to commit to specific outcomes due to the complexities involved. It's not about the software itself; it's similar to using Excel - the tool is the same, but the outcomes can vary greatly depending on how it's used. Mark: I'm curious about what SAP Digital Supply Chain customers need to know regarding the move to SAP S/4HANA. What are the direct and indirect impacts they need to consider? Darcy: The focus of our current strategy is to transition to 'Rise' and 'Grow'. 'Grow' represents our public cloud initiatives, while 'Rise' refers to our S/4 offerings in the cloud. This transition is essential because it supports our rapid development pace. By moving to the cloud, we enable our customers to deploy updates and new features swiftly. We are emphasizing the importance of 'Clean Core' in this process. The goal is to encourage customers to adopt a streamlined, standardized approach, moving away from customizations. This aligns with our vision of having customers who utilize Clean Core in the cloud, rather than partners who primarily focus on customizing our software. Our objective is to support the evolution of our customers into intelligent enterprises, characterized by supply chain risk management, resilience, and sustainability. We understand that each company's journey with SAP is unique. Some are heavily invested in customized ECC, while others may already be using S/4HANA. Regardless of their starting point, the aim is for them to transition to 'Rise' or adopt our public cloud solutions ('Grow'). To facilitate this transition, we are working closely with each customer to tailor their path to the cloud. This personalized approach takes into consideration factors like supply chain transformation, which can be a driving force for moving to 'Rise'. In practical terms, this could involve transitioning specific systems like EWM, TM, or leading with IBP, and then strategizing on how to integrate the core system. SAP is developing programs to assist customers in this journey, utilizing tools like Signavio and others to streamline the process. Additionally, we are addressing the upcoming end of life for APO by guiding APO customers towards new solutions. Our strategy is not just about a platform shift; it's about adding value through transformation, particularly in the supply chain, to facilitate a smooth and beneficial transition to 'Rise' for our customers. Mark: Let’s make the last word be about AI. What AI investments has SAP already made that impact the DSC portfolio? And what more is planned over the next 12-18 months? Darcy: Looking ahead, SAP aims to be a leader in AI by 2025, driven by user adoption. Our approach embeds AI into our solutions, making it relevant, reliable, and responsible. This includes understanding and learning from over 250 companies' business processes, ensuring data reliability and adherence to governance standards. Our AI tool, Joule, is a game changer. Unlike other systems, Joule can answer complex queries because it has access to comprehensive data, making it a trustworthy source for decision-making. This innovation positions SAP at the forefront of creating a risk-resilient supply chain.