Given recent efforts to keep factories running, manufacturers continue to feel the effects of an unstable supply chain. Fluctuating demand is triggering tremendous pressure to quickly retool production, adapt designs, and innovate new offerings. Meanwhile, supply flows continue to be interrupted by delivery bottlenecks and short-term change orders.
Smart, agile supply chains are vital to building resilient operations that can weather today’s uncertainty as well as any future storms. We see businesses reassessing their technologies, realigning the workforce, and reconsidering product and service design to rapidly address market needs, take on opportunities, and mitigate risks. But to truly gain better control of the entire value chain, they need to re-balance their capacity load – from safety stock level and vendor-managed inventory allocations to fully integrated communication with suppliers and OEMs.
Resetting the supply chain
The fast-moving shifts of supply chain flow, customer demand, and geopolitical mandates call for critical rethinking of value chain capacity load balancing. All too often, geographically isolated and globally expansive supply chains are less reliable when communication and transparency into the area of sourcing or production are limited – a risk that outweighs any opportunity for cost reduction.
To overcome such challenges, discrete, industrial, and automotive manufacturers need to develop new processes, experiment with different technologies, and create an ecosystem that is more collaborative and responsive by tackling five fundamental capabilities:
- Safety stock adjustments: Continuous reassessment of minimal inventory should be based on real-time shifts in customer needs, experience, and demand, not a general rule of thumb.
- A/B/C classification: Manufacturers can create priorities for specific areas of needed action by categorizing materials.
- Just-in-time or just-in-sequence deliveries: Increased transparency across the full supply chain improves coordination of production and material flows, reducing shop-floor downtime and the need for consistency checks
- Supply chain transparency: Collaboration and visibility across all aspects of the supply chain build the resilience and agility to reduce the impact of risk events.
- Integration of third-party interactions: The scaled deployment of intelligent technologies – such as artificial intelligence and predictive analytics – enables supply chain organizations and the rest of the business to capture and act on real-time insights.
For many manufacturers using either SAP S/4HANA or the SAP ERP application, SAP consulting services for digital supply chains provide the guidance needed to optimize inventory. The service allows them to choose, implement, customize, and operate the right load capacity in ways that are optimized to help eliminate production downtime and gain better control over the end-to-end manufacturing supply chain.
As part of the SAP Advisory Services, specific consulting services are aimed at achieving a resilient and optimized supply chain, which include:
- Supply Chain Business Assessment: A strategic advisory service that starts with identifying strategic business objectives like service levels, customer prioritization, cost objectives, and supply chain risks. A digital supply chain framework with leading edge use cases, simulations, and advanced supply chain risk management provides accelerators for this service. The outcome is a clear action plan, based on a holistic consideration of the end-to-end supply chain.
- Procurement Business Assessment: The scope of analysis includes both the procurement strategy and category management on the one side, as well as operational procurement processes and system support to address both effectiveness and efficiency of procurement. Specialized methods and tools, supported by machine learning and other technologies, are used to achieve sustainable improvement in procurement performance. The outcome includes optimized category policies as well as operational best practices, based on the SAP Intelligent Procurement portfolio.
- Transformation Advisory Service for SAP Process Mining by Celonis: Analyze the as-is SAP process landscape and transform it towards an optimized north star. It provides fast time to value, with a standardized, proven approach to create a baseline for large scale process improvements and transformations.
Through our off-site delivery framework, our consulting service does not require an onsite project team to help optimize inventory levels. Results include:
- 50% fewer supply chain errors
- 31% lower stock levels
- 40% more flexible interactions and transparency across global supply chains
- 19% faster decision-making
- 25% higher service levels
The delivery foundation for these capabilities is based on proven methodologies – acquired from 25 years of experience in supporting businesses worldwide remotely – for deploying solutions in the cloud or hybrid environments quickly. Our structured approach provides strong governance and online access to content, ready-to-run processes, and accelerators. The services also support the entire application lifecycle management end to end – from configuration to deployment and live – with a range of built-in tools.
Creating a sustainable solution for supply chain resilience
As part of SAP Services and Support offerings, SAP consulting services for digital supply chains will undoubtedly help companies optimize their on-hand inventory volume for a world of constant change.
It’s true that producing and maintaining safety stocks cost money. But manufacturers should also consider the cost of not having stock available when customers want it – regardless if there’s a breakdown in the supply chain or a production shutdown. And once the right balance is found, manufacturers can gain better control of their supply chains.