Breaking Free from Legacy Distribution: SAP SDM for Oil and Gas Secondary Distribution

SAP SDM, developed by Implico, addresses the needs of oil and gas secondary distribution with 90% out-of-the-box business coverage. The solution automates dispatch planning, optimizes routes, and integrates with existing SAP infrastructure. It preserves the SAP clean core strategy and typically requires a 3-6 month implementation, compared to 12-18 months for traditional custom development approaches.

SAP SDM, developed by Implico, is a pioneering solution tailored to the unique needs of oil and gas secondary distribution. The system offers 90% out-of-the-box business coverage, automating dispatch planning, optimizing routes, and seamlessly integrating with existing SAP infrastructure. This capability significantly reduces implementation time and operational costs, making it an attractive option for oil and gas companies seeking to modernize their distribution operations.

Automated Dispatch Management

One of the standout features of SAP SDM is its automated dispatch management. The system evaluates customer orders, inventory positions, vehicle capacity, and delivery constraints to generate optimized schedules in minutes rather than hours. This efficiency is achieved by considering factors such as product compatibility, regulatory requirements, and driver availability. Additionally, compartment planning functionality optimizes vehicle loading by analyzing product specifications, contamination risks, and cleaning requirements, ensuring maximum vehicle utilization and product integrity.

Intelligent Route Optimization

SAP SDM incorporates advanced routing algorithms that consider traffic patterns, delivery windows, vehicle specifications, and driver regulations. These algorithms create routes that minimize transportation costs while maintaining service levels. The system's integration with GPS and telematics systems provides real-time delivery tracking and enables proactive customer communication. In case of disruptions, the system automatically recalculates optimal routes and updates stakeholders, reducing manual effort and improving customer satisfaction.

Clean Core Implementation Benefits

A key advantage of SAP SDM is its adherence to the SAP clean core strategy. The solution is based on best practice processes and requires no modifications to standard SAP functionality, ensuring smooth upgrades and reduced maintenance overhead. This approach allows for customer-specific requirements to be addressed using SAP in-app or side by side extensibilities without compromising system stability or long-term flexibility.

Measurable Business Impact

Organizations implementing SAP SDM report significant cost reductions of 40-60% compared to custom development. Operational improvements include dispatch planning time reductions of 70%, improved on-time delivery performance, and decreased safety stock levels through better demand forecasting. The solution also includes built-in compliance frameworks for transportation, environmental, and safety regulations, reducing manual oversight requirements while ensuring adherence to industry standards.

Implementation and Strategic Considerations

Typically, SAP SDM implementation requires 3-6 months, compared to 12-18 months for traditional custom development approaches. Pre-configured integration points for terminal automation, tank gauging, and laboratory systems eliminate common integration challenges that extend project timelines. Implico's partnership brings four decades of experience in liquid goods distribution and oil and gas retail operations, ensuring the solution addresses real-world operational challenges.

Conclusion

SAP SDM is a robust solution that addresses the critical needs of oil and gas secondary distribution. By automating dispatch planning, optimizing routes, and integrating with existing SAP infrastructure, the system offers immediate operational benefits while maintaining long-term system flexibility. With a clean core implementation strategy and a proven track record of measurable business impact, SAP SDM is a strategic choice for companies seeking to modernize their distribution operations.

References:
[1] https://community.sap.com/t5/sap-for-oil-gas-and-energy-blogs/breaking-free-from-legacy-distribution-how-sap-sdm-delivers-90-business/ba-p/14174967