How to Implement Supply Chain Digitisation via SAP Business Network
To thrive in the 21st century, companies need to become more flexible, innovative, and efficient.
The changing nature of global business means that companies can no longer afford to be inflexible and static. They need to adapt to change, and supply chain digitisation is an essential part of this process.
Digitisation is changing the supply chain, and agility is the new competitive differentiator. It is at the heart of all business and technology trends and has a significant impact on the world of trade and logistics. The digitization of the supply chain is a crucial success factor for many companies as it enables them to be faster, more flexible, more granular, more accurate and more efficient.
This article discusses the processes involved in supply chain digitisation from four critical angles: strategic goal-setting, network security integration, data analytics, and process automation.
Set Strategic Goals
Digitalisation can be a complex process, and it requires a lot of planning and preparation. First, you have to ask, what is the desired outcome of digitising your supply chain? Is it reducing operational expenses? Is it improving customer service? Or is it bringing more visibility to your supply chain?
Such questions would help you clarify your objectives and goals. Ultimately, digital transformation must be understood as a journey, not a destination. Therefore, it is not as simple as filling all desks with computers.
Like any journey, you need to look at where you are now, where you want to go, and how you get from point A to B. Once you understand these, you can develop an implementation roadmap around those objectives.
For instance, if a company’s operational strategy is to stay competitive by boosting productivity and reducing costs, digital technologies like cloud supply chain management (SCM) can help it reach those goals. SAP Business Network is an example of a cloud resource that helps you collaborate with suppliers better and manage your supply chain in real-time.
Secure your Networks
The trend towards connectivity in the supply chain is accelerating. Supply chains are more and more networked, thanks to which the decisions taken in the meantime can be quickly implemented in real-time.
The potential benefits of digitalizing supply chains and the information they give to manufacturers, retailers and logistics service providers are clear. But supply chain digitization also brings new cyber risks, with potentially serious consequences.
This is especially true as the interdependencies between companies and their suppliers, distributors, and customers create complex supply chains. Therefore, it is not difficult to comprehend the rise in third-party supply chain attacks.
Effective cybersecurity requires a combination of controls, policies and processes, and these need to be adapted to the specific challenges posed by the organization’s supply chain. And cybersecurity must be implemented from the get-go. The state of cybersecurity today is such that it must be implemented by design rather than a feature to be plugged in.
In accommodating cybersecurity considerations for supply chain digitisation, the OSI Model explanation comes in handy. It helps you build a comprehensive cybersecurity approach that cuts across all network layers.
Adopt Data Analytics
Digitising your supply chain is supposed to create opportunities for value creation, operational improvements and enhanced business value. A digitally-enabled supply chain enables companies to gain insights that will allow them to make better decisions, reduce risk and increase efficiency and responsiveness.
However, all these are possible only if you know how to utilise and leverage data. Your suppliers are generating a mountain of data every day. Some experts even explore the angle of ‘data supply chains’, similar to physical ones but more comprehensive in approach.
Without a dashboard, that data sits and does nothing. On the other hand, with that data, you can project into the future based on what’s happening now — and you can have the insights you need to make strategic decisions.
That is what SAP enables businesses to achieve through the Asset Intelligence Network, although, as its name implies, it is dedicated to tracking equipment usage from a centralised data repository.
The point is this: digitising your supply chain is only worthwhile if you can capture and analyse data. So, beyond inventory counts, for instance, you must extract meaning from the data to make accurate predictions and enhance your decision-making capabilities. That is the actual value of supply chain digitisation.
Of course, that also means your organisation must involve its people in the technological shift. Basically, your organisation’s capacity to understand and use data is also critical. Developing analytics capabilities, then, means giving your employees skills to work with and interpret data.
The digitisation process in the supply chain requires the integration of different systems, methods and procedures. The focus is on the data exchange between these processes and the automation of predefined functions.
Digital supply chains integrated with industry 4.0 birth Supply Chain 4.0. According to McKinsey, one of the notable features of Supply Chain 4.0 is to automate anything.
The fast flow of goods in supply chains requires consistent planning. As a result, the planning processes must be highly flexible and must adapt to changing requirements. For example, in the past, the buying process was almost entirely manual. Now, buyers and suppliers alike are embracing digital automated procurement tools, from cloud-based sourcing platforms to artificial intelligence.
The key to a successful supply chain is flexibility. When demand fluctuates, your supply chain must be able to respond quickly, adapting to meet the sudden increase in production or demand. This means your supply chain has to operate in a highly flexible way. Therefore, you have to take advantage of digital technologies to automate your operational flow.
In today’s digital age, supply chain digitisation is a no-brainer for most businesses. The benefits are clear: improved accuracy, faster cycle times, enhanced flexibility, and increased visibility.
Finally, while this article has explained the broad principles necessary for digitising your supply chain, you must manage expectations correctly. Every organisation’s idea of “digitisation” is slightly different, so it’s important to outline exactly what you’re trying to achieve. With the right approach, your supply chain will be more efficient, and your productivity will increase. Ultimately, that’s a big win for your bottom line.