Is It Possible to Digitize a Supply Chain?

For manufacturing-focused industries, supply is the most important thing to manage.

To illustrate the complexities of managing the supply of a manufacturing bill of materials, consider the manager of a plane manufacturer. To make a plane, he needs things like aluminum, fabric, computers, engines, etc. He do not have all these materials, so he sources metal from Germany, computers from China, and engines from Australia.

How does he make sure he gets all these parts get to the right location at the right time? How does he avoid miscommunications? How does he keep the supply chain running smoothly?

Is it possible to implement GPS tracking? GPS can keep track of raw materials as they move from place to place. But with so many different parts originating from all over the world it can be difficult to keep track of each shipment individually.

What if all the parts suppliers manually reach out as parts ship? Or the plant managers call as parts arrive? While this keeps the manufacturing management team updated on the production status, there are too many shipments and not enough time to manually check in with each supplier via phone call/GPS. This process needs to be automated and simple.

Is it possible to track the delivery logistical details of raw materials and parts? SAP is making strides in this direction. The idea is to make an accessible platform where managers can easily track moving assets. Then they will know exactly where the raw materials and parts are at any given time.

How SAP Leonardo for Discrete Manufacturing, Logistics Option, Can Help

The goal of SAP Leonardo for Discrete Manufacturing, logistics option, is to improve communication between suppliers and manufacturers. By achieving this, the supply chain will benefit from improved inventory levels, reduced logistical costs, a greater percentage of on-time deliveries, and ultimately higher customer satisfaction.

Using SAP Global Track and Trace and SAP Cloud Platform, this industry innovation kit is able to track the shipments of raw materials and components in real time. It then sends the real-time location of the shipments to the cloud, where the information can be accessed by the entire supply chain. Everyone knows exactly when and where these shipments are, as well as their estimated arrival time. This will increase on-time shipments and improve supply chain satisfaction. Logistics costs will also lessen due to more on-time shipments. And because everyone is connected through SAP Cloud, the whole supply chain can react efficiently to anything out of the ordinary.

Additional Use Cases

SAP has broken down logistics into two separate categories: production logistics and delivery logistics. I spoke with Ulf Guttmann, an industry solution manager at SAP, on the topic to learn more.

In production logistics, the purpose is to ensure that each machine  or work station is supplied with the proper materials, in the proper quantity, at the proper time. The data gathered from monitoring production logistics can prove helpful in many ways. With this data, companies can understand how to schedule and run machinery to obtain the most production. They can figure out which asset is receiving too few supplies or too many supplies and make the proper adjustments.

Delivery logistics is a portion of the logistics function that plans and controls the movement of shipments. It is important that the data gathered from delivery logistics is accurate and reliable. This way it can be used to push production forward. For example, managers can use the data from the shipments to keep everyone in the supply chain up-to-date on delivery operations. Not only will everyone be on the same page, all parts of the supply chain can make adjust to accommodate any unexpected changes.  For example, if a critical path part is delayed then workers can be moved to another part of the production floor until that part arrives.  Or if finished goods are delayed then retailers may need to delay advertising a product until it becomes available for purchase.

By digitizing the supply chain with SAP Leonardo for Discrete Manufacturing, logistics option, users can make logistics more transparent and in turn propel production forward. They can reduce logistics costs, make better staffing choices, and keep the whole supply chain connected.

Watch a video to learn how the logistics option can help discrete manufacturers in the high tech and industrial machinery industries.