Martin Hofer is an old dog in the world of supply chain management; his expert opinion is widely admired in the industry. He started as a project manager at Wassermann AG in 1997; today, he is a Partner at valantic and Managing Director of the valantic Competence Center Supply Chain Excellence, which merged with Wassermann AG in 2017. In our series of articles entitled “5 Questions for…”, we spoke to Martin about companies’ current challenges with regard to supply chain management, about the changes since the merger with the valantic Group, and the future of the industry.
Martin, since 2017, Wassermann AG, which for decades was one of the leading supply chain management providers on the German market, has been under valantic’s umbrella. You experienced the times at Wassermann AG live and you also worked under the company’s founder, Otto Wassermann. What has changed for the company since then?
Frequently, people forget how new the discipline of supply chain management is. The term appeared for the first time in the early 1980s. With the establishment of Wassermann AG in 1983, Otto Wassermann made a significant contribution to making supply chain management a big, significant topic and task in Germany. The visiondays, which Wassermann AG started in 1990 as a trade congress, have played a large role in establishing SCM as an independent discipline and supply chain planner as a profession.
Many of the original ideas, concepts, and thoughts are still valid today. Even then, Otto Wassermann ranted against “information silos” and “departmental thinking.” As a pioneer, he advocated early on for controlling and optimizing the value-creation chain as a whole, planning without backlogs, and – at the time not yet a matter of course – for doing this with software tools. On-time performance and the shortest possible throughput times, low stocks and inventories, cost optimizations – these topics and goals still move supply chain managers today.
These are also valantic’s core topics and challenges. Something that has developed significantly and changed radically are the technical possibilities, methods, and tools. They create entirely new possibilities and therefore change the work of the people responsible for the supply chain. Today, the information from global supply chains runs into systems in real time. But we are also informed about upstream processes, because the systems of our customers, suppliers, and logistics partners are networked with one another. All participating employees have the same information from everywhere and at all times, and our software can also simulate the most complex value-creation chains with all their dependencies. Today, the “single point of truth” has become reality in real time on a company network.
Wassermann AG had a special philosophy and approach when it comes to supply chain management. Have you taken these over or were there changes under the aegis of valantic?
Yes, that’s true. Otto Wassermann had clear concepts, he was pugnacious, and stood up for his ideas passionately. But don’t visionaries have to do this? Doesn’t resistance have to be nipped in the bud? You can’t always be everybody’s friend all the time.
Professionally, many basic concepts in supply chain management are still valid today – and yet they are changing. Here’s an example: A credo of Wassermann AG was always that an effective structure and flow organization are part of a high-performance supply chain. More precisely: Someone has to be able to plan across all levels of the supply chain, be able to make decisions, and be authorized to make decisions. That’s why organizational consulting is still part of our portfolio. Many of our projects are largely organizational projects and not just technology projects.
If I look into the future and see the handwriting on the wall with regard to the rapid development of digitalization, software, and artificial intelligence, I definitely see changes on the horizon. I’m convinced that many decisions will be made by IT systems in the future. Even today, we use software to create complete plans and scenarios based on optimization rules – the human planner then checks and optimizes these based on this suggestion. The human being will remain responsible, but many detail decisions can be made automatically by learning systems.
It’s precisely here, with the enhancement of the tools and software, that our customers can profit from our new positioning. Thanks to the merger with valantic, today we have entirely different possibilities, we can access a huge network of experts. And so today, we are an SAP Partner in the disciplines S/4HANA, C/4HANA, IBP, EWM, and TM. And in the cloud technologies sector and with our waySuite, we can implement state-of-the-art SCM strategies and approaches.
How has your work changed in recent years within the valantic Group?
With regard to my work, I notice: Digitalization requires networking – not just between systems, but also between people. In addition to my responsibilities as Managing Director, today my main task is increasingly to network customers, the employees of our Competence Center for Supply Chain Excellence, and colleagues from the entire valantic Group. Tremendous expertise is bundled at valantic, both in terms of IT and various specialties. I would like to use this for our customers’ projects. But this doesn’t happen by itself in customer projects. Anyone who is not aware that our group has special expertise and experts won’t arrive at the idea of asking for help and advice on a project. At the same time, we often need help “translating” customers’ requirements so that IT experts know where and how they can sensibly begin. And we need new skills that we must provide in our company in order to be able to further support and inspire our customers.
I read once that instead of working FOR his company, a Managing Director should work ON his company. I think in this respect the team of Managing Directors and Partners at the valantic Group is on the right path.
What basic challenges do you see today for companies when it comes to logistics and supply chain management and does supply chain excellence mean something different today than it did before?
On-time performance, low costs and inventories, short throughput times – little has changed with regard to supply chain management. As I said before, the tools have improved dramatically – but at the same time, the basic conditions have become much more complex. Supply chains have many layers internationally and must be in a position to react extremely quickly to fluctuations and volatile procurement and sales markets. Flexibility is much more important than it was before. If an automobile manufacturer talked about a variety of models previously, there were just a few models. Let’s take the example of our customer BMW: significantly more model series, in significantly more variants and country versions. Any anyone who has configured a car on the Internet knows, even among the tens of thousands of BMWs delivered, there are seldom two identical models. Another example: Years ago, we worked to incorporate the data from suppliers, development, and project teams – today, some customers use weather, traffic, and economic data from the Internet in order to manage possible effects on their supply chains in the SCM software.
Now you’ve also gone to the cloud with your latest product, Connected Chain Manager from valantic. This is a new step for you. Can you explain how this came about?
We had been observing for a few years that thanks to globalization, global delivery networks are becoming more complex and ever more companies are participating in value creation. Especially in recent history, the need to make these delivery networks transparent has increased correspondingly. This can happen either against the background of supply assurance and risk minimization or for reasons of supply chain responsibility: Consumers are currently more interested than ever in the origin and sustainability of the products they are buying. Only cloud software enables us to bundle and structure information from so many globally networked companies. Therefore, for us our Connected Chain Manager was the only feasible way to prepare and make all of this information available to all supply chain partners as an online platform.
Thank you very much for the conversation, Martin!