Improving supply chain resilience with SAP’s technologically advanced solutions

Only 6% of companies report full visibility of their supply chain despite transparency being needed for operational excellence. In a time of increased disruption across the value chain, high-level management of every element of the supply chain is necessary for businesses to be able to continue to serve their customers.

But how do you build a connected and resilient supply chain? Digitizing the value chain with SAP Digital Supply Chain increases visibility through its capabilities in accurate and automated reporting of issues and improves agility through the prediction of and fast response to changes.

Challenges in today’s supply chain

Businesses around the world are currently navigating highly volatile periods because of financial instability caused by high inflation, bankrupt suppliers, consumers that have a lower purchasing power, and also the increasing cost of energy, transportation and raw materials. These challenges are only compounded by the political instability caused by the war in Ukraine, commercial trade blockades and mass strikes, and they affect supply chains more than any other type of organizations.

To make matters worse, customer demands drop and rise unexpectedly as people have an ever-growing catalog of products to choose from. Additionally, customers expect their rapidly changing demands to be met immediately. Also, regulatory changes can also be disruptive as governmental bodies intend to reduce emission and increase compliance.

How are these challenges exactly affecting the business environment?

The consequences of disrupted supply chains

What can this mean for businesses today? First of all, even the entire supply chain can be disrupted as a consequence of a local problem. Any changes in inventory can affect demand and supply because the demand would not match an excess of unrequired stock or a shortage of in-demand stock. As well as lacking resources, the supply chain might lack the human resources needed to run effective operations. Therefore, the activities associated with supply chains everywhere become highly inefficient due to high operational costs and low usage of machines and transportation vehicles, causing value leakage. All these consequences cause companies to hemorrhage money and lose market share.

Instead businesses need resilient supply chains to be able to reach their full potential. This type of supply chain has the ability to counteract risks of disruption, quickly recover from issues and be flexible enough to adapt to changes. One solution in particular provides these characteristics.

What is a resilient supply chain and what solutions should businesses rely on?

A resilient supply chain is equipped with the necessary means to resist disruption and other risks, is able to recover when they happen, and is flexible enough to quickly reshape itself in the face of changes.

SAP’s Digital Supply Chain enables businesses to build an agile, transparent and connected supply chain that is prepared for current and future challenges, and maintains productivity levels while responding to disruption. It has a multitude of capabilities to manage and secure the supply chain including machine learning and artificial intelligence technologies used to collect data from structured and unstructured sources ranging from devices to social media to customer feedback. It then analyzes the data to detect patterns, learn from them and be able to forecast risk and demand patterns, sense market share changes, predict threats and recommend actions and responses. Some of the most important benefits of this solution is its ability to find new revenue sources, detect potential competitive advantages that sets companies apart from their competitors, adapt to demand changes and supply chain constraints, and mitigate high-risk events.

SAP IBP, pMRP and DDMRP provide capabilities in the areas of optimizing production and utilizing capacity. Inventory buffers are flexible enough to closely follow changes in demand and supply, virtual inventories can be set up to deliver anything and anywhere even on short notice. Future capacity is determined by demand and planning simulation scenarios for the highest possible accuracy. The Control Tower ensures end-to-end visibility. Combined, these capabilities increase efficiency and resource utilization, and shape capacity to requirements.

Furthermore, the Industry 4.0 compliant, cloud-based solution, SAP Digital Manufacturing Cloud manages plant operations by introducing an industrial level IoT system to the supply chain. Previously setup sensors that provide a 360º view, are able to report on factories, warehouses and transport networks and collect digital information that can help supervisors determine the root cause of production inefficiencies. Real-time alerts ensure any issues are dealt with quickly. It can also improve the management of machine operations by automatically recording defects. This leverages the potential of industrial assets, increasing efficiency and minimizing losses.

Another important solution that plays a large role in creating supply chain resilience is SAP Logistics Business Network. It connects multiple business partners for inter-company logistics collaboration. Its global Track & Trace feature allows businesses to monitor shipments throughout the supply chain and manufacturing process at an international level. This creates transparency, fosters accountability, improves the management of unexpected situations and increases decision-making efficiency.

Finally, by establishing a supply chain interconnected network, companies can adapt quickly to unexpected disruptions or shifts in demand by making quick changes to the supply chain structure and diversifying suppliers and manufacturing partners. They are then also able to collaborate with an increased number of partners which improves flexibility and adaptability to changes and increases general responsiveness. Interconnectedness reduces costs and mitigates logistics risks. Real-time tracking creates visibility of all operations across the network.

NTT DATA’s unique approach to securing supply chain resilience

At NTT DATA we have a unique approach to implementing SAP Digital Supply Chain for businesses. Before enacting any steps in the implementation process, we leverage the expertise of consultants to comprehensively assess the customers’ supply chain maturity and its strengths and weaknesses. From this, we devise a complete supply chain evolution roadmap that leverages the best technological solutions.

We can also ensure the best combination of technologies is used by rapidly implementing pilot solutions to run a subset of the organization’s processes. This provides proof of concept and the opportunity to experiment with alternative solutions to determine the best on a case-by-case basis. Our ultimate priority is to help our customers sustainably grow by accompanying them during the transformation journey to a digital and connected supply chain.

How could we help your business to transform through supply chain resilience?

Claudia Pascual, Supply Chain Senior Manager