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Enterprise Analytics: A Core Capability for Restoring Supply Chain Profitability 

For most companies, the pandemic is a reminder of how fragile supply chains can be. Not even years of cost-cutting and workforce optimization can safeguard businesses from the impact of volatile demand and the exposure of well-hidden value-chain gaps and logistical bottlenecks. Instead, most supply chain organizations constantly address challenges as they happen, leading to rising costs, more frequent shortages, and suboptimal profitability.

 

Is it possible that businesses have streamlined their supply chains to the point of concentrating their risk? Yes, especially with a traditional just-in-time model in which businesses have just enough components stockpiled to fulfill forecasted demand.1 This approach does not safeguard businesses from the impact of surging demand – a nightmare scenario of product shortages, dissatisfied customers, and lost revenue.

 

For many supply chain organizations, the writing is already on the wall: they must advance their technology strategies to prepare for future disruption. Every change that’s happening today and will happen in the post-pandemic era requires a strong enterprise analytics strategy focused on sensing, analyzing, and responding to market dynamics and mitigating late deliveries and shortages early.2

 

The tie between profitability with data-driven insights

Underpinning every supply chain decision is data. But first, users must access integrated business planning, digitalize manufacturing processes, adapt market and commodity pricing, manage environmental sustainability, and make asset management more intelligent. All these pillars of complete and contextual enterprise analytics are integrated with the SAP Analytics Cloud solution.  Please read Sam Castro’s vision on how companies can fund manufacturing operations by applying analytics to Financial, Demand & Manufacturing data.

 

Take, for example, Hyundai Elevator Co. Ltd. The manufacturer of the world’s fastest elevator, as well as escalators and moving walkways, offers a wide range of services from custom manufacturing to installation and maintenance. All these moving parts mean a lot of data; however, multiple ERP and supply chain management systems and data silos across departments and regions made it difficult to gain a clear enterprise overview.

 

Through SAP Analytics Cloud, along with the SAP Data Warehouse Cloud solution, Hyundai Elevator connected all these data sources to provide a central view as well as user-friendly, self-service analytics technology that any employee could use. The elimination of data silos empowers business units to deepen their business insights and better understand emerging supply chain shifts – from orders to manufacturing, sales, and maintenance. The company can also implement new analytics projects instantly and run them quickly without burdening its ERP.

 

Whenever companies, including Hyundai Elevator, can augmented analytics to make decision-making easier for all employees, the greater the impact and value of the business and their workforce. In fact, 70% of decision-makers from companies leveraging augmented analytics experienced revenue growth of 10% or more, on average, within the first three years.3 When comparing this finding with companies growing less than 10%, the study revealed adoption of augmented analytics capabilities was higher by a factor upwards of 1.8 times among businesses with the higher revenue growth.4

 

While Hyundai Elevator is a large enterprise, Forrester’s correlation also applies to smaller businesses. Consider Arpa Industriale’s experience when serving the analytics needs of its 575 employees.

 

To establish the most direct, no-latency connection between its factory’s network of sensors and core SAP software, Arpa connected the factory’s programmable logic controller (PLC) directly to plant connectivity software. This enables Arpa to create dashboards in the SAP Analytics Cloud solution that use real-time sensor data from the factory to meet production, quality, and waste targets.

 

Using dashboards, predictive analytics, and embedded automation in SAP solutions, Arpa can identify best practices and teach those practices to the factory’s machines, systems, and people. In return, the company has reduced the consumption of water, energy, and other resources by 80% and gained a €750,000 cost savings in production within the first year.

 

Meeting the analytics needs of an “anything can happen” world

Every business has clearly witnessed significant gaps and weaknesses in their supply chain. But the good news is that enterprise analytics, such as SAP Analytics Cloud, is available to provide the level of transparency and insight needed to resolve them with ease and move forward confidently.

 

Whether a company is as large as Hyundai Elevator or as small as Arpa, enterprise analytics can be the key to identifying trends, detecting anomalies, automating data quality tasks, and making predictions. Insights become more accessible, insightful, and actionable no matter where and when employees work. And more importantly, exciting advancements – such as artificial intelligence, machine learning, chatbots, and natural-language processing – are making it easier than ever to impact business profitability in more tangible and recognizable ways.

 

For more use cases on how SAP Analytics Cloud can help your supply chain organization derive incremental value for your digital supply chain, contact your local SAP representative or partner and visit us at sap.com/analytics-cloud.

 

 

Sources 

  1. How the World Ran Out of Everything,” The New York Times, June 1, 2021.
  2. Six Ways Supply Chain Analytics Mitigate Business Disruptions,” Gartner, 2021.

3.,4. “Enabling Data-Driven Decisions Through Augmented Analytics,” Forrester, sponsored by SAP, 2021.

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