He's SAP's point man in manufacturing. Claus E. Heinrich, 49, is responsible for all manufacturing industries at the world's largest applications software provider, keeping tabs on trends in segments ranging from automotive to chemical companies. As a member of SAP's executive board, he oversees the development of mySAP Business Suite products in PLM, manufacturing and SCM, as well as the SAP NetWeaver components Master Data Management and SAP Auto-ID Infrastructure. If that's not enough, he also oversees human resources and labor relations at the software giant, whose workforce numbers nearly 30,000.

But a particular interest of the tall, rangy Heinrich is the evolution of the supply chain concept itself. A PhD in business administration, Heinrich's first book on the subject, called "Adapt or Die: Transforming Your Supply Chain into an Adaptive Business Network," was published in 2003. In it he advances the idea that adaptive business networks are necessary to streamline supply chains and improve customer service by creating efficient webs of communication among all supply chain participants and the customer. Now, he's putting the finishing touches on a second book, this one on RFID and its application to industry, expected to be published by the end of the year.

Q: How has your view of supply chain management changed?

It used to be about increasing turnover to cut costs. Today, the supply chain is viewed as a key differentiator. It's not time-to-product; it's time-to-market. It's about getting replenishment signals and much better integration.

The boundaries between SCM and customer relationship management are diminishing, and PLM fits in with SCM on creative design. What's important is to have all the collaborative elements in the equation and to think in terms of consumer-driven supply chains.

Q: Are manufacturers you are working with embracing this view?

We are working with Proctor & Gamble's chief of operations on what we call the consumer-driven supply chain. Real-time events come in, everything is driven by demand. The paradigm shift is, "I don't need a model in the future. I have signals and communication from the real world. I only look if there's an exception."

Q: What is the degree of difficulty manufacturers will face in moving toward the idea of demand-driven chains?

I've talked to many plant managers and others about it. Manufacturing has become a commodity. Manufacturers must be clear they are part of the supply chain. If they don't want to play the game, somebody else will.

Q: What role do you see RFID playing?