The Optimized Route to a Digitalized Supply Chain for Large Enterprises

Supply chain digitalization is one of the most overlooked areas for digital transformation despite a McKinsey study finding that digitalization of this business area is the most impactful as it can create a boost to annual growth of earnings before interest and taxes of 3.2%.

Business leaders could be passing up on this growth opportunity due to the seeming immensity of such a project, especially for large enterprises. The supply chain has lots of moving parts and complex technology would be needed to support it. Additionally, the supply chain underlies the operations of the business so it needs to be digitalized correctly so as to not disrupt operations.

At NTT DATA we support enterprises to manage the scope of supply chain digitalization from the technical details to strategical implementation, ensuring a more than worthwhile ROI of the transformation. For example, we successfully digitalized the supply chain of one of the bigger oil companies in Colombia. 

The Value of Digitalizing the Supply Chain

The oil company needed to comprehensively digitalize their supply process to generate more efficiencies such as reducing the times of transactional activities. They also wanted to develop analytical capabilities for informed decision-making. For this to be possible, they needed to facilitate the interaction of the supply chain with internal customers, bidders, contractors, and suppliers.

Furthermore, having accurate and reliable information promptly delivered to the organization would drive growth. This would enable them to be a business at the forefront of the energy sector. Even better, such a digital transformation would improve the quality of life for the workforce behind the supply chain.

End-to-End Digitalization Support

To ensure positive business outcomes, we supported the oil company’s supply chain digitalization throughout the lifespan of the project. We guided them through exploration, design, implementation, and the launch of a SAP-based digitized supply chain. The strategy behind modernizing processes was a SAP solution based in the cloud and relying strategically and tactically on Ariba and Fieldglass.

SAP Ariba

One of SAP’s high-value procurement tools, SAP Ariba supports effective spend management, providing real-time insights for agile financial decision-making. SAP Ariba is suitability comprehensive as it has modules for procurement, sourcing, supplier management, and payment processing. A major benefit of SAP Ariba is that it connects users to the SAP Business Network, creating easy communication with millions of trading partners worldwide.

Fieldglass

Fieldglass is SAP’s vendor management system which digitalizes the communication with external workforces for better synchronization. Procuring services to fulfill pending assignments with speed and ease is an essential requirement of managing today’s flexible workforce. It provides one cloud application for onboarding workers, assigning jobs, improving productivity, enhancing security and streamlining other vendor management processes. Centralization leads to optimization.

These key SAP applications had preconfigured processes that would speed up time to value while also being customizable to effortlessly meet the needs of a large oil company and seamlessly integrate with their current business processes to minimize the disruption of migration and maximize positive business outcomes.

The Positive Business Outcomes of a Digitalized Supply Chain

Digitalization isn’t just about keeping up with the latest trends in technology. It’s about improving performance to better serve customers and enable industry-leading business growth.

Real-time single source of truth

Supply chains rely on various time-sensitive processes. Therefore, a key component of supply chain digital transformation is creating a single source of truth that reports real-time insights so informed decision-making can match the speed of changes in the supply chain. Analytical decision-making is leading growth management in today’s market.

Additionally, we digitalized the strategic purchasing process by automating key actions and unifying all transactions in one place. This transformation made it much easier to manage inventory, timelines and any delays or issues that occur as they occur. With a real-time single source of truth, enterprises can be agile and adaptable.

Third-party management

Strong communication with third parties is essential to the smooth running of supply chains. Any delays in communication can cause a disruptive ripple effect that negatively impacts the end user. In this digital transformation, the relationship with third parties including customers, bidders, contractors and suppliers was supported by reducing the printed documents involved in the supply process. Digitalized communication minimized response time, allowing processes to flow with ease.

The addition of Fieldglass to their value stack in order to manage outside workforces also supported third-party management as they could utilize people power as and when they needed it. It gave them full flexibility which makes it easier to handle the ebbs and flows of the supply chain and adapt to ever-changing customer demands without costly delays.

Operational efficiency

Another beneficial consequence of digitalizing the supply chain was the time saved by making operational activities more efficient. With increased efficiency comes increased capacity and agility and elevated customer service for the end user.

Such a high level of operational efficiency was able to be achieved in this case because we ensured the oil company had a fully traceable supply process from start to finish. Areas of inefficiency can be almost instantaneously highlighted and resolved. Visibility and traceability are also important for sustainability as the enterprise can provide proof of environmental impact throughout the supply chain.

Expert-led digitalization of the supply chain process is a digital transformation project that fulfills modern needs for future-focused growth.

NTT DATA: Your Digitalization Partner

NTT DATA has extensive experience which we could draw on to successfully complete this project, having worked widely in the energy sector even becoming the strategic ally of leading oil companies and being involved in many implementations of the Ariba solution.

A significant source of success for this oil company’s supply chain digitalization was our end-to-end approach because they could leverage our expertise and experience at every stage. We accompanied them from the initial exploration phase to help identify improvements to the existing supply processes and the business procurement process. Then we went on to lead the digitization via Ariba and Fieldglass.

Consequently, we had the capability to meet all objectives in a timely manner and in a collaborative and efficient way. For expert guidance in modernizing and digitalizing the supply chain, contact NTT DATA, a valued Global Service SAP Partner and SAP Platinum Partner in many countries.