Breaking Free from Legacy Distribution: How SAP SDM Delivers 90% Business Coverage Out-of-the-Box

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Breaking Free from Legacy Distribution: How SAP SDM Delivers 90% Business Coverage Out-of-the-Box



Your secondary distribution operations face mounting pressure. Manual dispatch coordination consumes valuable time while delivery schedules struggle to adapt to changing demands. Legacy systems require extensive customizations that compromise SAP upgrades and inflate IT costs. Route planning relies on experience rather than optimization algorithms, leading to suboptimal fuel consumption and vehicle utilization. 

The oil and gas industry demands better solutions. Modern distribution networks require real-time visibility, automated decision-making, and seamless integration with existing SAP infrastructure. Traditional approaches of building custom solutions or heavily modifying core SAP functionality create technical debt that becomes increasingly expensive to maintain.

SAP SDM: Purpose-Built for Downstream and BULK logistics 

SAP SDM (S4SCSD) , developed by Implico  as part of SAP S/4HANA Supply Chain for Secondary Distribution, addresses the specific requirements of oil and gas secondary distribution. The solution covers approximately 90% of best practice business processes out of the box, significantly reducing implementation effort and operational costs. 

SDM operates within SAP's Business Technology Platform architecture, maintaining clean core principles while delivering industry-specific functionality. This approach eliminates the traditional trade-off between operational capability and system maintainability that has plagued oil companies for years. 

Automated Dispatch Management 

The system automates dispatch planning by evaluating customer orders, inventory positions, vehicle capacity, and delivery constraints. Dispatch teams can generate optimized schedules in minutes rather than hours, with the system considering factors such as product compatibility, regulatory requirements, and driver availability. 

Compartment planning functionality optimizes vehicle loading by analyzing product specifications, contamination risks, and cleaning requirements. The system maximizes vehicle utilization while ensuring product integrity and regulatory compliance. 

Intelligent Route Optimization 

SDM incorporates advanced routing algorithms that consider traffic patterns, delivery windows, vehicle specifications, and driver regulations. The system creates routes that minimize transportation costs while maintaining service levels. Integration with GPS and telematics systems provides real-time delivery tracking and enables proactive customer communication. 

When disruptions occur, the system automatically recalculates optimal routes and updates stakeholders. This capability reduces the manual effort required for exception management while improving customer satisfaction. 

Clean Core Implementation Benefits 

SDM's product architecture preserves your 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.  

Customer-specific requirements can be solved using SAP in-app or side by side extensibilities without modifying the standard code. Your IT organization gains powerful downstream capabilities without compromising system stability or long-term flexibility. 

Implementation typically 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. 

Measurable Business Impact 

Organizations implementing SDM report implementation 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 level through better demand forecasting. 

The solution includes built-in compliance frameworks for transportation, environmental, and safety regulations. A capability that reduces manual oversight requirements while ensuring adherence to industry standards. 

Demand Forecasting and Distribution Planning 

SDM analyzes historical consumption patterns, seasonal variations, and market trends to generate accurate demand forecasts. The system considers inventory availability, supplier lead times, and customer requirements to optimize distribution planning. This functionality reduces stockouts while minimizing inventory carrying costs. 

Sales order automation streamlines the creation of quotations, orders, and invoices. The system integrates with customer portals and mobile applications to provide self-service capabilities that reduce administrative overhead. 

Implico Partnership Advantage 

Implico brings four decades of experience in liquid goods distribution and oil and gas retail operations. Their specialized knowledge ensures SDM addresses real-world operational challenges rather than theoretical requirements. The company's holistic consulting approach includes business process optimization, change management, and comprehensive knowledge transfer. 

Implico's quality assurance program provides structured implementation methodology that minimizes project risk. Their team understands the complexities of oil and gas and liquid management  operations and can navigate the unique challenges that arise during system deployment. 

Strategic Implementation Considerations 

SDM enables oil and gas companies to modernize distribution operations without disrupting core SAP functionality. The solution provides immediate operational benefits while maintaining long-term system flexibility. Pre-configured processes address the majority of secondary distribution requirements, allowing your team to focus on optimization rather than basic functionality development. 

Market conditions and regulatory pressures require efficient distribution operations. SDM provides the technology foundation to compete effectively while managing costs. The solution's industry-specific design eliminates the compromises typically required when adapting generic supply chain tools to oil and gas operations. 

Your distribution network can benefit from intelligent automation and real-time visibility. SDM delivers these capabilities through proven SAP technology while maintaining the clean core principles essential for long-term success. 
 
For more information about how SAP SDM can optimize your secondary distribution operations while maintaining clean core architecture, contact Implico to discuss your specific requirements and implementation approach.