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Modernizing Supply Chains: The Autonomous AI-Driven Future

Aerial front view of container cargo ship

This year at SAP Sapphire, SAP unveiled its vision for AI: to transform supply chains from digital to adaptive and ultimately toward autonomous, characterized by improved massive data-driven intelligence, system-driven recommendations, predictive insights, and contextualized decisions.

According to the IDC 2024 Supply Chain Survey, 63% of respondents “have an AI strategy linked to business objectives” to improve operational efficiency, business resilience, and increase employee productivity.

Our objective in this digital, adaptive, autonomous supply chain journey is to utilize the breadth of AI technologies to assist customers in achieving their business goals and drive significant value regardless of their current maturity level in business practices and technology.

Tap into AI and optimize your risk-resilient, sustainable supply chain to predict, manage, and deliver at your best

Business Challenges in Integrating AI

Business leaders see significant challenges in integrating AI into business applications and processes, especially when trying to make sense of vast amounts of unstructured data. These challenges specifically stem from:

These challenges underscore the need for a thoughtful approach to integrating AI into supply chain processes. SAP Business AI delivers a comprehensive set of relevant, reliable, and responsible AI solutions that effectively tackle many of these hurdles and ensure seamless AI adoption throughout your supply chain processes.

Our Vision of AI-Enabled Supply Chains

For decades, SAP has led the way in supply chains, empowering its customers to streamline their complex end-to-end supply chain processes for enhanced efficiency, agility, and resilience. The SAP Supply Chain portfolio introduces innovation through various technologies, including AI, to transition your supply chain from digital to adaptive, with the ultimate vision of instituting an autonomous supply chain.

There are three possible maturity levels where you could stand in your business transformation. It is also important to acknowledge that different lines of business are on different maturity levels in an organization – while supply chain planning may already be somewhat adaptive, manufacturing operations may still be at the start of a digital transformation.

Technologies that Lead Toward Autonomous Supply Chains

SAP has been developing innovative AI capabilities that are fully integrated across digital supply chain applications, catering to diverse customer technology readiness levels. For example:

With these technologies, our goal is to support customers wherever they stand in their journey and help them move from a focus on mere digital transformation to highly adaptive processes — and ultimately toward autonomous supply chain systems.

Examples of AI Innovations

Let’s explore specific innovations delivered in the SAP Supply Chain portfolio: These cases are classified according to their primary focus on digital, adaptive, and autonomous as a continuous journey. These innovations will be enriched over time and every business may find themselves at a different stage of maturity in different parts of their supply chain processes.

Digital

Intelligent Lead-Time Prediction for More Accurate Integrated Business Planning
This machine learning extension enables the extraction of historical lead times from goods movement data in SAP S/4HANA and analyses outliers and key influential factors for lead time changes to predict future lead times. The results are then uploaded as input for planning runs within SAP Integrated Business Planning, thus facilitating better decisions, and enhances plan adherence by considering the dynamic nature of actual lead times and future trends.

Everstream Powered Risk-Aware Supply Chains for SAP Integrated Business Planning
Critical data for decision-making can sit outside of the four walls of a company. Using external network data is imperative for better decisions based on supply chain risks in a digital transformation. This capability integrates external incident data — for example from Everstream Analytics — into SAP Integrated Business Planning and enables companies to proactively anticipate and manage external risks in their supply chain planning process. This integration allows supply chain planners to perform risk-aware planning by actively reflecting external risks affecting their supply chain, such as geopolitical shifts, material shortages, global regulations, extreme weather events, and more. Figure 1 illustrates this innovation:

Fig. 1: SAP Integrated Business Planning – Planner Workspace

Adaptive

Product Design and Formulation

SAP Product Lifecycle Management (SAP PLM): Generative AI for Recipe Formulation
In the process industry, technology plays a crucial role in recipe creation and formulation to meet consumer demands. A fast time-to-market of launching a new recipe, in compliance with local regulation and sustainability targets, can be paramount to the competitiveness of a company. Generative AI integrated into SAP PLM assists in developing, enhancing, and customizing recipes, thus expediting product innovations, enhancing productivity, and supporting product compliance and sustainability for manufacturers of formulated products. Figure 2 illustrates this innovation:

Fig. 2: SAP Product Lifecycle Management – Generative AI for Recipe Formulation

Logistics

SAP S/4HANA Transportation Management: Intelligent Goods Receipt Analysis
In high-volume logistics industries, the manual tasks involved in inbound goods receipt can be time-consuming and error-prone. By leveraging AI-based document extraction, this use case automates data extraction from freight documents, seamlessly integrating them into SAP S/4HANA, enhancing efficiency, accuracy, and time savings.

Asset Operations

SAP S/4HANA Enterprise Asset Management: Intelligent Maintenance Order Recommendation
LLMs optimize maintenance planning, promote agility, and improve asset performance and reliability in SAP S/4HANA enterprise asset management. In this innovation, generative AI supports users in the assessment of maintenance requests by recommending appropriate tasks and spare parts, thus enhancing operational efficiency. Figure 3 illustrates this innovation:

Fig. 3: SAP S/4HANA Enterprise Asset Management – Intelligent Maintenance Order Recommendation

Autonomous

Supply Chain Planning

SAP Integrated Business Planning: Interactive Planning Assistant
Demand, supply, and inventory planners often use complex machine learning algorithms. By using generative AI and conversing with Joule in natural language, planners can gain insights into the models’ variables, constraints, and decision processes, leading to much more informed decisions and proactive planning. SAP helps customers boost explainability but also enable what-if scenario simulations for complex planning decisions. Figure 4 illustrates this innovation:

Fig. 4: SAP Integrated Business Planning – Demand Planning

Manufacturing / Industry 4.0

SAP Digital Manufacturing: AI-Driven Visual Inspection
In industrial manufacturing, human-led visual inspection can lead to potential quality issues and is synonymous with a higher degree of manual labor. This capability applies computer vision AI into the production process to automatically identify defects and allocate non-conformance for production decisions, thus supporting a consistent and objective quality analysis that contributes to cost savings associated with reworks and recalls. Figure 5 illustrates this innovation:

Fig. 5: SAP Digital Manufacturing – Visual Inspection

Join the evolution and embrace AI, whether you are in a digital transformation or already driving toward adaptability or are taking your first steps toward autonomous supply chains or functions.

More Details

Ready to revolutionize your supply chain using artificial intelligence? Here’s how to get started:

And stay tuned for more Early Adopter Care programs and updates on future innovations.


Dominik Metzger is head of SAP Digital Supply Chain for SAP Product Engineering.

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