The past two years have crippled the global supply chain and logistics; most businesses have slumped from the economic setback caused by the pandemic. Both logistics and supply chain management have stretched boundaries revealing inefficiencies and areas that need improvement.
The modern supply chain is compelled to evolve to handle new demands that require supply chain managers to plan and strategize. This planning will set the right premise for the business to prepare and adapt to such requirements. If the year 2020 caused disruptions that most consumer goods brands aren’t accustomed to seeing, 2021 is exposing businesses to a competitive market trying to bounce back. The shift to online retail, increase in consumer confidence, pent-up demands, and an uptick in customer savings offer tremendous potential particularly for digitally native brands.
With logistics and supply chain challenges persisting this year, businesses are witnessing increased consumer spending on products, a sustained appetite for the convenience of buying online, and catch-up required from last year’s bottlenecks. And yet, despite 2021’s fragile supply chain network, companies are adjusting to these changes by addressing inefficiencies head-on and seeking to work smarter and not just harder.
All of this makes it imperative for businesses to have digital connectivity in the logistics and Supply Chain Management (SCM) ecosystem, including suppliers, manufacturers, internal support teams, and customers. SCM challenges can be addressed using the cloud technology and by providing real-time insights, and end-to-end visibility of the supply chain.
Until recently, businesses have relied on passive data loggers that capture location, loads, trips, etc. that came in after completion. For supply-chain logistics, learning about issues in real-time as compared to receiving information later can help firms prevent the loss, or deploy just-in-time replenishment if needed.
Even if they were able to simultaneously collect all kinds of information that could help them anticipate risk, prevent the loss, improve efficiency and make customers happy, it still would be disparate. Most business data today are still siloed. Supply-chain information needs to be collected and shared across operations to prevent inefficiency and waste, not to mention larger implications for companies’ overall environmental footprint. Digitizing the supply chain will save companies significant budget resources as a result of waste reduction while reducing their carbon emissions too.
In short, technology will help solve supply chain management issues and logistical challenges.
Technological advancements such as 5G, real-time data transmission, and robotics, the Internet of Things (IoT), and data analytics will empower logistics and supply chain managers with greater visibility across areas of the distribution channel and improve maneuverability when issues occur.
Large business houses have the potential to transform into smart factories and warehouses can work on increasing their square footage capacity. Autonomous processes can address the biggest challenge- labor shortage. Technology can drive agility to a large extent but let us remember that still there are many processes in the chain that require human intervention. With technology and automation, digitalization can reduce inefficiencies; provide shared data sets which permit end-to-end supply chains through a connected trading partner network. This in turn helps businesses make better decisions and obtain visibility throughout the execution of all supply chain functions.
More and more supply chain functions are thus centralized and integrated across areas enabling cross-functional collaboration and optimizing internal resources.
When information shared on the SCM system is passed on to suppliers and distributors across the different locations with accuracy, it triggers growth and customer satisfaction. SAP SCM is a tool provided by SAP AG for managing the supply chain process of an organization such as planning, networking, and execution of all supply chain-related activities.
SAP SCM is SAP-integrated, supply chain software that increases business agility to effectively respond to changes in market demands. SAP SCM can vastly improve overall efficiency and productively streamline network logistics. However, SAP SCM is not a single application but consists of a cluster of software applications that helps organizations perform operations such as supply chain networking, supply chain planning, supply chain coordination, and supply chain execution.
- Allows businesses to manage processes networks, coordination, execution, and planning in detail.
- Businesses can partner with businesses worldwide through a networked supply chain.
- Businesses can respond to demand s systematically by building the right design of a supply chain infrastructure.
- With effective coordination businesses can act according to various reports with inventory and cost controls.
SAP Product Lifecycle Management: It is used by organizations around the world to manage the development lifecycle of both physical and digital products. It manages product development projects, product costing, product engineering, product development, and a lot more.
SAP Integrated Business Planning: It is a cloud-based solution that consists of functionalities such as sales & operations planning, forecasting and demand, response and supply, demand-driven replenishment, and inventory planning. It is powered by machine learning and artificial intelligence that enables capabilities such as what-if simulations, alerts, and predictive planning.
SAP Digital Manufacturing Cloud, SAP Manufacturing Execution, and SAP S/4HANA Manufacturing: These are applications used to streamline end-to-end manufacturing processes. They include functionalities such as manufacturing operations management, comprehensive planning features, integrated scheduling, managing equipment effectiveness, etc.
SAP Warehouse Management & Extended Warehouse Management: These are used for warehouse management and contain functionalities such as logistics management, storage and operations, outbound logistics management, freight logistics collaboration, global track and trace, and much more. The Extended Warehouse Management includes both core functionalities of SAP WM and additional capabilities such as internal routing and labor management.
SAP Transport Management: It is used to manage the transportation aspects of goods across locations; contains functionalities such as strategic freight management, order management, transportation planning, and transportation execution.
SAP Enterprise Asset Management: It maintains and manages the performance of the business’s physical assets. It consists of modules such as asset information management, centralized asset data repository, automated equipment tracking, work order management, and mobile asset management.
A lot of these applications contain predictive analytics and machine learning which helps organizations to predict consumer behavior well in advance and accordingly prepare for the same.
Supply chains and logistics are complex global networks, not just linear transactions, and can no longer afford to stick to legacy technology. Cloud technology is easy to use, flexible and scalable. As a result, data analysis possible to capture and analyze any kind of data. Advances in information storage allow for the transmission of more kinds of data, and to target precise and unique impacts that have customized to the type of supply chain.
Optimizing the supply chain process with SAP SCM transforms how businesses perform. Choose the right SAP SCM partner to implement one right away.