With all the turbulence roiling supply chains and logistics patterns over the past few years, beleaguered business leaders might have hoped for calmer waters to navigate in 2023. But they’d be sorely disappointed!
Stormy seas continue to buffet global commerce, with disruption unlikely to subside anytime soon. Contributing factors include the gathering pace of extreme weather events, increasingly stringent regulatory requirements for environmental, social, and governance (ESG) reporting, escalating labor costs, ongoing geopolitical conflict, mutually reinforcing inflationary and recessionary pressures, and the trend toward regional fragmentation of trade – or what some analysts call “globalization in reverse.”
Amid such unrelenting volatility, how can enterprises instill resilience, foster collaboration, and harness sustainability throughout their operations and those of their trading partners? Through cloud-based digital networks linking together mission-critical business processes, organizations can achieve the degree of transparency needed to ensure continuity and extend competitive advantage in these uncertain times. A comprehensive view across interconnected operations, particularly those involving logistics, supply chain management, and enterprise resource planning (ERP) systems, enables trading partners to track a product all the way from sourcing to manufacture to distribution – and everywhere in between.
With SAP Business Network for Logistics, shippers and carriers can collaborate to help optimize logistics processes, increase on-time deliveries, and mitigate supply risk. The network features three primary solutions: SAP Business Network Freight Collaboration, SAP Business Network Global Track and Trace, and SAP Business Network Material Traceability.
Through SAP Business Network Freight Collaboration, trading partners can achieve optimal logistics collaboration, capacity utilization, operational responsiveness, and real-time market insights. The solution enables shippers and carriers to jointly manage logistics transactions, exchange documents, and obtain insights into improving process efficiencies.
SAP Business Network Freight Collaboration offers three overarching capabilities: it allows shippers to digitally collaborate with trading partners on freight orders for contracting (tendering and subcontracting), execution (milestones and documents), and settlement processes. In addition, the solution facilitates the scheduling of dock appointments and gate processing, enabling businesses to orchestrate the loading and unloading of goods irrespective of who manages the yard or initiates the shipment. Meanwhile, SAP Business Network Freight Collaboration offers seamless data integration into SAP S/4HANA. All three of these digital capabilities enable organizations to extend their reach and deepen their collaboration with the trading partners on which they rely to create value, across different modes of transportation.
In a business climate highly prone to change, the ability to obtain actionable, instantaneous insights into the fulfillment of orders and transit of goods is essential. These insights can automatically be fed back into the planning system to mitigate the real-time impact of disruption and automate reactions to it. With SAP Business Network Global Track and Trace, enterprises can strengthen their situational awareness by harnessing the power of geolocation tracking, enabling the early detection of potential disruptions in time to pursue alternatives and maintain production schedules. Businesses can improve their responsiveness through the immediate mitigation of exceptions made possible by transparency across trading partners.
Customer satisfaction, meanwhile, can improve thanks to businesses’ ability to promptly update the estimated time of arrival for shipments. Through a unified, integrated platform, trading partners can benefit from a holistic and consistent end-user experience across geographies and modes of transportation, transforming reactive supply chains into predictive ones.
Cloud technologies are helping supply chains to become not only more predictive but also more accountable. Material traceability has become increasingly important in recent years as governments – from Germany and Australia to the United Kingdom and California – enact legislation aimed at transparency and accountability in supply chains. Verifying the absence of forced labor, the level of carbon emissions, or the attainment of other environmental objectives is essential to comply not only with local regulations but also with stakeholder values.
To this end, SAP Business Network Material Traceability enables companies to follow raw materials and finished products across all participants in the n-tier value chain. Initially developed with the food supply chain in mind but subsequently expanded to other industries, the solution draws upon the cloud-based analytics and integrated ERP data necessary to support targeted recalls or other compliance processes involving trading partners. As an example, SAP Business Network Material Traceability is a major component of the Catena-X data ecosystem for the automotive industry, through which dozens of manufacturers, suppliers, dealer associations, and application developers have set a uniform standard for the secure sharing of data throughout the value chain.
Transparency must reach beyond the traditional supply chain to include logistics partners as well, so that actionable insights are accessible throughout the core operational processes on which trading partners mutually depend. Aided by cloud-based applications, businesses can minimize the risks associated with disruption through broad visibility. But only when visibility becomes actionable can true resilience be achieved. Only through tightly integrated, highly responsive supply chains can businesses foster the agility and accountability demanded by consumers, trading partners, shareholders, and regulators. Through SAP Business Network for Logistics, trading partners can achieve the superior execution necessary to plan together accurately, innovate collaboratively, and execute successfully.
Paige Cox is senior vice president, chief product officer, and head of SAP Business Network.