Improving resilience is a challenge for any business during the pandemic era. A connected approach can allow companies to anticipate potential issues and limit the impacts of significant disruptions.
According to McKinsey, large companies lose two-quarters of their profit every 10 years due to supply chain disruptions. High-caliber disruptions can push operations back by months and quickly put a company into a state of permanent mitigation. This demonstrates an immediate need for supply chain operations to improve their resilience and make sense of vital forecasting information.
The pandemic disrupted most supply chains worldwide, producing a need for accessible technology that is powerful enough to handle massive amounts of data and make sense of analytics.
For industrial applications, integrating asset management and optimizing how companies monitor equipment also proved to impact the damage caused by disruptions. Digital transformation seen in all sectors during the pandemic has also created a complex environment of digital communications and security that can also cause severe supply chain disruptions.
How SAP Improves Supply Chain Resilience
SAP systems, powered by artificial intelligence (AI), can converge data from multiple data sets across departments, companies, and the globe. Machine learning algorithms are built to allow visibility into forward-looking predictions, making it the perfect tool to augment traditional strategic planning.
Real-time insights provided by connected devices also contribute to a company’s ability to bounce back and reveal opportunities for improvement in the future. Proper supply chain resiliency means creating transparency across networks and utilizing automated technologies to enhance operations and free up workers to focus on production and sustainability.
In an era fraught with instability, traditional risk management protocols are not enough to reduce complexities. Unexpected disruptions that occur in other regions can have a significant impact on supply chain performance. But innovative technologies like blockchain, sensors, and advanced analytics can help reduce the damage caused when these disruptions happen. Today’s digital supply chain technologies are necessary for businesses to maintain revenues.
In addition to implementing capacity, increasing inventory buffers, and diversifying suppliers, SAP intelligence can improve supply chain resilience in several ways.
Here are 3 ways that SAP can improve supply chain resilience:
1. Preparation
Taking a realistic approach to planning and goal setting can significantly offset costs and setbacks caused by significant disruptions. SAP can be used to assess your current workflows, processes, and assets so that you can have a clear picture of where your business stands. Use it to map your entire supply chain from end to end and assess your inventory management processes and assets as well.
The metrics-driven operational efficiency that SAP provides can help you highlight risks that may have been overlooked and make clear what other opportunities for meaningful improvement to take place. Times that call for goal readjustment and process implementation also call for optimizing your teams.
SAP can also help you identify gaps in training and employees that would benefit from upskilling. This doesn’t necessarily mean that they need to be entirely reeducated. According to a recent study, coding bootcamps were cited by 50% of respondents as an effective way to retrain workers that don’t have college degrees or those that need upskilling. This helps set businesses up for success by positioning your staff to be prepared for potential growing pains that come along with making significant changes.
2. Procedures and Operations
Supply chain optimization procedures that create a shorter product lifecycle are in high demand. Unfortunately, this can lead to disruptions without the proper planning and processes. A successfully implemented SAP landscape allows your company to become more resilient with predictive analytics, increased agility, and transparency. Supply chain managers can benefit from the ability to anticipate disruptions and mitigate those risks in real-time.
Additionally, SAP allows businesses to leverage intelligent technologies such as artificial intelligence and machine learning to provide insights and coordinate supply networks automatically. Political, economic, and environmental factors often play a part in disruptions. The visibility that SAP provides is unmatched when it comes to supply chain forecasting.
3. Logistics
Logistics has long been the backbone of supply chain management. Adequate planning is essential. An on-demand logistics network that can expand and shrink as needed with resources available in real-time is one of the many ways that SAP offers logistics solutions that can help companies maintain operations and circumvent disruptions. Resiliency can be created by bringing multiple technologies like machine learning, advanced analytics, and the Internet of Things (IoT) together in ways that allow supply chains to become faster and more powerful than ever before.
SAP intelligence stretches across all aspects of the business. This includes communications between departments. Self-auditing processes integrated with business planning functions help companies build a culture of communication. This means that leveraging data and insights throughout the company can become more streamlined. When disruptions occur, all teams are equipped with the necessary information to find solutions quickly.
A company’s resilience directly affects its ability to see growth as products, procedures, logistics, and supply chain technologies become more complex. Supply chain operations present the most opportunities for risk and opportunity in many different industries, so investing in optimization is necessary going forward. Allowing visibility to occur in all operations within a network empowers companies to reevaluate their current processes in real-time.
Conclusion
The vulnerability of linear operations has had a significant impact on supply chains during the pandemic, and businesses have come to realize how important it is to be more resilient in the years to come. In fact, 92% of executives agree that visibility within the supply chain is crucial for their company. Still, only 27% say they can achieve the level of transparency that is required.
The use of integrated, intelligent supply chain technologies and SAP solutions helps businesses to improve their awareness of operations and procedures to maximize assets, minimize spending, and mitigate disruptions seamlessly. To learn more about SAP, visit our SAP insights page, where you can access our SAP whitepapers, webinars, data sheets, and much more.