Generally, increased automation makes for a much more efficient business cycle. For SAP users, the move towards automation is expected since lower production times, coupled with decreased production costs, have a high appeal to businesses. Automation tends to lead to better customer response because of the shorter time for shipment, the reduced cost of goods, and the higher quality of produced material. Because of these factors, many SAP users have started to consider integrating automation into their supply chain management.
The most forward-thinking adopters have already invested time and effort into putting a plan in place for integrating their SAP systems with automation technology. SAP provides the Integrated Business Planning (IBP) solution to clients to ease this transition. Other companies that don’t want to use the SAP tools have different forms of integrated supply and operations planning (S&OP) software implemented. Only the companies that don’t see the necessity for change haven’t started changing into a system that prioritizes automation as yet.
Advanced Technology’s Place in Automation
Businesses have already understood how technology can give them an edge against their competitors, and several advanced technologies have already made their way into functional devices for more efficient business processes. AI and machine learning have shown their usefulness in developing automation systems that can learn from their mistakes. IoT technology can help with automation as well, which increases the volume of data that the operation can utilize to learn from. By combining IoT in agriculture with AI and machine learning solutions, businesses can use this technology to update information in inventories automatically and utilize the raw data in developing strategies for distribution and supply chain management.
Digital Supply Chain Planning
To fully utilize the power of automation within the supply chain, a business needs to move away from the idea of an analog system. Instead, it must shift its business into using a digital system as its primary means of supply chain planning. To successfully change into digital supply chain management, SAP customers need to focus on several critical component areas such as:
- Supplier Collaboration: Suppliers need to be brought on board the digital system to supply firsthand information about products that the business acquires from them. The visibility of this information is crucial to the establishment of a properly functional digital supply chain system. Electronic data interchange (EDI) systems help to collect and catalog this data.
- Automation of Accounts Payable (AP): Most businesses categorize their AP department under finance, but having their data linked to the supply chain system can benefit for finance and planning. Additionally, in areas where digital invoicing is necessary, the supply chain system can vet those invoices through the finance department before goods are transferred.
- Managing Promotions and Rebates: Businesses can utilize automation to set up rebates or promotional management as a marketing tactic. Automation makes it easier to develop a system for increased demand over the sale period.
- Self Service Order Tracking: IoT devices can enable real-time updates of locations for shipped products, allowing customers to track their orders until delivery.
- Supply Chain Management Master Data Generation: Constantly updated data allows for complete SCM data management and establishment of a centralized server for all data storage.
- Warehouse Management: Better inventory numbers means more accurate warehouse numbers and an increase in the level of customer service. Solutions such as SAP Extended Warehouse Management (SAP EWM) with customized use cases for a particular business are ideal for integrating with digital supply chains.
For SAP customers, integrating digital supply chain management into their existing business functions doesn’t need to be a challenging prospect. Customers should identify how digital supply chain management will affect them and the areas that will be most disrupted by its implementation. Using the existing data in the SAP ERP system can help to maximize the efficiency of the integration. Finally, ensuring input from the business’ IT department is crucial in guaranteeing the success of implementing a digital supply chain model.