A high degree of orchestration, communication, collaboration, and trust helps manufacturers ensure the raw materials, parts, products, and distribution resources all work seamlessly together to produce and deliver products on time and without waste. How? With SAP S/4HANA at the core of the IT landscape.
Demand on global supply chains has undeniably reached a whole new level over the last few months. Between the mechanisms used to trigger production and the relationships needed to deliver finished products, people are keenly aware of the complexity and delicate nature of this complex, highly connected business function.
Demand patterns are highly volatile, surging and bottoming out at a moment’s notice. This reality is leaving supply chain leaders feeling the pressure to find better ways to accommodate drastic and sudden fluctuations. But when even the simplest products comprise components from a wide variety of sources from around the world, this take can be overwhelming without access to the right intelligent tools.
Managing Highly Volatile Demand
The increasing speed and volatility of demand magnify the importance of trusted relationships between employees, suppliers, logistics, production operations and customers. When one party changes, the rest of the value chain must adjust just as quickly to ensure its integrity as a highly connected and dynamic supply chain.
While legacy enterprise resource planning (ERP) systems help streamline and optimize internal operations, the technology is often ill-equipped to keep up with massive volumes of data being captured and the speed at which change happens.
It is now imperative to optimize network-based interactions with participants in critical processes, such as procurement, contingent labor and talent management, integrated business planning, and asset management. By uniting all these systems into an intelligent ERP, such as SAP S/4HANA, acting as a single source of data intelligence, supply chains can detect patterns early, orchestrate processes, and implement resource modifications as needed.
Synchronizing Supply Chains on a Global Scale
During times of global change, companies often form third-party supply chain partnerships, such as outsourced manufacturers, logistics providers, and design and research consultants. These arrangements can become increasingly complicated as businesses rely on their software systems more to help ensure all parts of the extended value chain run smoothly.
When elements of the product life cycle are orchestrated to take advantage of core competencies, resources, and cost advantages, businesses can benefit from advanced planning techniques from SAP S/4HANA. For example, predictive material requirements planning considers real-time capacity and material availability and provides detailed demand forecasts to help meet current and expected customer needs.
Achieving Differentiation Through Trusted Delivery
In uncertain times, customers place an extraordinarily high premium on brands that fulfill their promises consistently. This quality is the goal of a resilient supply chain.
Interconnected and reliant on deeply connected, real-time data and capabilities integrated in SAP S/4HANA, supply chain operations can quickly adapt to changing needs successfully. This approach is particularly useful when proper contingencies are built into the system’s workflow, such as alternative vendors, designs, and logistics providers, to fulfill the need.
Responding with Speed and Individualization
A fundamental part of establishing customer trust is providing products that meet unique needs. Such individualization requires a level of manufacturing and operational automation that has been adopted by leading companies over the last ten years and is now embedded into the SAP S/4HANA architecture.
SAP S/4HANA helps manage product variants with greater ease, providing accurate availability to promise and synchronizing internal and external supply chain partners through deep connectivity to business networks. By moving to Industry 4.0 with integrated Internet of Things (IoT) capabilities, businesses can automate orchestration and calibration across supply chain operations and processes with SAP S/4HANA at the core of the IT landscape.
Transforming Global Supply Chains to Take Charge of Change
In these challenging times, supply chains are at the forefront of digital transformation, and those companies that can build the new engine will seize the opportunity for growth and emerge stronger than ever.
By using SAP S/4HANA to focus on core competencies, build greater customer intimacy, and drive internal operational excellence, businesses will design and produce personalized products in novel ways to fulfill customer needs. More importantly, they increase trust across the entire value chain, proving themselves as partners committed to helping their customers differentiate themselves.
Read more in the “Building Resilience Against Business Turbulence” series.
Discover how your business can provide the supply chain resiliency you need to navigate through turbulent times and plan for whatever comes next. Read the Harvard Business Review article, “What Companies Should Do to Prepare for a Recession,” and explore the intelligent ERP, SAP S/4HANA.
David Sweetman is senior director of Cloud Global Marketing at SAP.