“The future of supply chain is now”

Ralph-Michael Schmidt is a partner at 4flow consulting responsible for digital transformation and SAP consulting services. With over 25 years of experience in logistics – from processes to IT – he brings a comprehensive perspective on current developments in the industry. In this interview, he talks about his passion for supply chain, the challenges of digital transformation, and how AI is changing the industry.

What excites you about supply chains?
For me, logistics keeps everything flowing. It brings together important functions such as purchasing, production and sales. I find this connective, cross-functional aspect fascinating. I’m particularly excited about how these processes get digitized. It's about transparency and automation, which we can achieve through technology.

When you look at the industry, what trends or challenges do you currently see?
For many companies, one of the key challenges right now is the SAP S/4HANA transformation. Since the switch should be completed by 2030 at the latest, companies need to act now. However, the real challenge lies not only in the transition itself but in leveraging the benefits of this investment. It's about establishing data-driven processes and real-time decision-making. This is where topics such as AI and analytics come into play. At 4flow, we support companies to transform their supply chains with SAP and develop an AI strategy to get the most value out of their IT investments.

That sounds exciting. Where do you see the greatest potential for AI?
There are many exciting use cases in logistics, for example in inventory optimization and demand forecasting. In the area of warehouse management – with systems like SAP EWM – AI offers a wide range of possibilities, from precise resource forecasts and optimized inventory management to automated error detection. Humanoid robots will also have the potential to take warehouse logistics to the next level. However, what is crucial at this point is making the right data available. 

Can you explain the importance of data in a little more detail?
Data is the oil of the future. It is a strategic resource that can be transformed into competitive advantages through processing, governance and the use of AI and analytics. The technology is already there, and computing power and cloud architectures are readily available. But what is often lacking is quality data to serve as the “oil” that “fuels” these new engines of digitization. Data becomes significantly more powerful when it is combined across systems – for example from ERP, EWM and CRM – and enriched with external sources for use in predictive models.

These days, it’s important to drive innovation quickly. The future of supply chain is now. I therefore always encourage my team to think outside the box and be disruptive.

What is particularly important to you as a manager?
I am convinced that a culture of error is crucial to being innovative. We must be courageous, move forward and remain resilient. And even if something goes wrong, we must get up and keep going. I am also committed to promoting my team members’ strengths and supporting them to develop their skills, while always taking into account work-life balance.

What helps you to strike that balance in your own day-to-day?
Cooking. I like to cook because I have complete control over everything, from the raw ingredients to the preparation to the result. In my day-to-day work, I deal with complex projects where you often don't see immediate, tangible results. When you cook, there's a beginning and an end, and in the best-case scenario, everyone is happy because they enjoyed the food. Cooking is like a successful little supply chain, you might say.