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Building an Intelligent Supply Chain: the Business Value of Augmented Reality and Virtual Reality Technologies

Global disruptions in the last couple of years have exacerbated supply chain risks and vulnerabilities. The uncertainty and volatility have tested supply chains in historic ways, and it may take years to completely overcome the impact of these disruptions. One thing is for sure, it is now a top priority for many enterprises to build more resilient and agile supply chains. This can be achieved by creating a digital thread through the end-to-end supply chain, equipped with Industry 4.0 intelligent tools and technologies. This blog is part of a series: Building an Intelligent Supply Chain.

Early examples of Augmented Reality (AR) and Virtual Reality (VR) were introduced in the 1950s to 1970s. Yet, they weren’t coined as AR and VR until close to 1990 and since then, the technology has evolved significantly both in capabilities and use cases. You might be more familiar with AR and VR in video games, but these technologies have proven to be extremely beneficial in a supply chain.

Don’t just take our word for it, supply chain organizations agree. The 2022 IDC spending guide on AR and VR states spending in AR and VR is expected to exponentially increase over the next 5 years with discrete and process manufacturing seeing some of the highest spending levels, and logistics and package delivery management with one of the highest spending growth rates.

Here at SAP, we talk about Design to Operate (D2O) as a way of highlighting the interconnectedness and interoperability of the end-to-end supply chain. By building a bridge between digital and physical environments, Industry 4.0 technologies like AR/VR augment the supply chain processes. Let’s take a detailed look at how it boosts the different elements of the D2O lifecycle:


Imagine building a prototype entirely virtually and getting it as close to market ready as possible before building it. AR/VR allows you to do that by having product designers, developers, and other stakeholders (even customers) virtually collaborate and create a product in 3-D. By creating the product in 3-D, you create a digital twin that will let you see the lifecycle of the asset virtually, through the entire supply chain process, and set up all the subsequent processes accordingly.

Virtual collaboration also decreases carbon footprint and 3-D modeling decreases raw materials usage and resources, creating both sustainable and cost-saving impacts.


In the manufacturing space today, AR and VR technology is used to safely train new operators faster. There are many more ways to leverage the technology to supplement manufacturing operations:

  • Recognize and streamline inspections faster with overhead cameras and reduce human error in the process
  • Check and validate execution of operations with overheard cameras that can validate minute details like hand movements, number of parts, and tools used
  • Build new plants or re-engineer existing plants in a virtual environment and save time and resources
  • Use live video assistance and virtual functions for production, assembly, or quality incidents

Benefits range from reducing human error to increasing productivity and efficiency, and from increasing worker safety to improving quality control, quality checks, and visual inspections.


A warehouse worker must run operations efficiently and handle multiple devices while performing tasks and fulfilling orders. This job requires an undoubtedly high level of accuracy along with the ability to work fast. AR/VR technologies can help warehouse workers handle peak demand with ease and lower the risk of human error. These solutions center their focus on scanning multiple barcodes at once, delivering real-time insights though AR overlays, getting optimized routes to navigate through warehouse sections with virtual maps, training employees in a virtual environment as well as suggesting next best activity to the user based on contextual awareness. Thanks to the new AR/VR solutions modern businesses have the benefit of streamlining and accelerating pick and pack operations, reducing user onboarding requirements and increasing worker safety.


Operating difficulties cannot be ignored either. Waiting for an expert to come in and fix maintenance issues can cause drastic service delays in the context of field management. Modern AR/VR solutions enable an easy and timely execution of end-to-end service, help discover assets regardless of location, and make an AR integration and visually guided step-by-step instructions for hands-free operation during maintenance possible. All of this impacts the operational processes in the most positive way: among the numerous advantages there can be found such benefits as maintenance quality increase, higher service execution quality, better workforce safety, improved overall productivity and increased customer satisfaction.


SAP believes that intelligent technologies such as AR/VR will bridge the gap between IT and OT integration and will dictate the future of supply chain. Businesses and supply chains already use some of these advanced technologies today, but the full potential of Industry 4.0 comes to life when they’re all used together.

Learn more about how SAP can help you achieve your full Industry 4.0 transformation leveraging intelligent technologies like AR/VR and contact your local SAP office or Account Executive to get started!


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