In a dynamic environment with ever-increasing requirements, supply chains must be structured to maintain a balance between profitability and the costs of minimizing risk. Precision is, therefore, important in the context of planning and forecasting goals, as well as the ability to manage the supply chain in real time.
Innovative answer to new challenges
In the face of market fragmentation and a multitude of subcontractors, it is important to have data organized in easy-to-read reports and analyzed in real time to reduce costs and gain a competitive advantage. This requires advanced tools and modern technology to control and optimize the supply chain.
The implementation of an SAP solution to optimize the supply chain affects not only the production process, but also the business strategy of the entire company. It allows for the integration of ordering parties and carriers, and the implementation process is transparent and user-friendly. In Magic Quadrant for Supply Chain Planning System of Record, a report published by the research company Gartner, SAP was recognized as a leader in planning solutions. Implementing SAP will help your company increase the stability and efficiency of its supply chain. It enables:
- quick responses to changing market conditions and optimization of the rotation of goods thanks to current data
- reduction of the time and cost of operations by optimizing business processes and lowering resource stock levels
- improvement of service quality and response to customer needs
- turning raw data into clear business information with the help of a robust reporting system
SAP solutions cover all links in the supply chain: material suppliers, manufacturers, distributors, and end users, which provides great potential for cost optimization.
Supply chain stability
For companies, globalization and outsourcing are associated with a number of benefits, such as improved profitability and access to larger markets. However, they increase the susceptibility of supply chains to various types of disruptions and threats. In recent years, during the pandemic or the war in Ukraine, we have learned how much political, social, and economic conditions can affect the stability of supply chains. During the crisis caused by Covid-19 and the related restrictions, car manufacturers, such as Honda, Jaguar, and Volkswagen, experienced serious difficulties, including the popularization of remote work and increased demand for microprocessors, which caused shortages on the market.
The shorter the supply chain, the less vulnerable it is
Changes on the international arena can affect the availability of manpower, resources, materials, components, services, and funds that are necessary for the proper functioning of supply chains. For example, stopping the production of components in a factory or blocking a port causes shortages of resources and delays in companies and ultimately leads to exponentially increasing losses. It is, therefore, important to ensure that a supply chain is not only efficient, but also resistant to disruptions. It is key to exercise as much control over the flow of information and products as possible. Such real-time supervision is possible thanks to SAP systems, ensuring optimization of supply chains and standardization and streamlining of processes:
- strategic planning based on short- and long-term demand forecasts, using algorithms, machine learning, analytics, and statistical modeling;
- production and lead time management;
- determining inventory levels.
Using the SAP HANA database, it is possible to process large amounts of data with in-memory technology, which significantly shortens the entire operation and allows for quick decision making. Comprehensive analysis leads to the identification of trends and niches, so can companies focus on the most profitable areas. SAP software supports the management of the entire supply chain and guarantees the integration of all company processes in a single system.
Supply chain flexibility
Political or social events may not only cause delays and generate additional costs, but also unexpectedly threaten the entire supply chain. They are difficult to predict and beyond our control, so it is important to be well prepared for such changes while minimizing the losses they can cause.
A supply chain is a system of dependent organizations that must cooperate closely. It is advisable to avoid situations in which we limit our sources of supply (single source). While this solution helps create a stronger bond with a business partner, it can have disastrous consequences in the event of a failure.
When optimizing the supply chain, it becomes necessary to properly set business priorities for demand, allocation, and constraints, e.g. in terms of production capacity or logistics. In the event of a shortage of goods, supply chain optimization may mean, among others, accelerating deliveries to key customers. Using real-time analysis of large volumes of data, we can more easily achieve a balance between inventory, quality of service, and profitability of operations.
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