Improve Supply Chain Transparency and Increase High Tech Competitiveness Using a Business Network
Jeff Howell, Vice President, High Tech Industry Business Unit, SAP
The high tech world moves fast – and it’s getting faster. Consumer demand for the latest, innovative technologies drives ever-shorter new-product development times. Meanwhile, the pressure is on to cut time to volume for new product releases to fulfill global order requirements.
At the same time, however, there are some aspects of high tech manufacturing that move at a slower pace. While product assembly may only take one week, the fabrication of the semiconductor chip that is a crucial part of that product can take four months, making this a pronounced bottleneck in the process.
Balancing supply and demand
To get products to market quickly and profitably at the speed required, balancing supply and demand effectively across all players in the extended high tech value chain is therefore crucial to success. But with multiple different businesses engaged in component manufacture, assembly, testing, and distribution, this can be a challenge.
Effective business process collaboration across all partners in a supply chain is key to synchronizing efforts across complex high tech ecosystems. And transparency is essential for effective collaboration. However, while digital processes are now the norm internally for companies of every size, external communications are still often paper-based, making it difficult to get visibility into processes that involve third parties. Indeed, a recent IDC survey1 found that 62% of document sharing with external suppliers is carried out manually. This is leading many to believe that information is moving slower than physical goods.
Achieving transparency beyond your own enterprise
Many high tech leaders believe that the answer lies in many-to-many business networks. Solutions such as SAP Business Network allow you to connect digitally with business partners to coordinate your efforts and exchange information in real time on everything from planning to delivery times to supply constraints.
These business networks don’t just help you connect with your direct suppliers. Upstream, they also enable you to track the progress of orders from Tier 2, Tier 3, or even Tier 4 subcontractors. And downstream, business networks support closer collaboration with your customers, allowing you to get order forecasts so you can more-effectively anticipate demand.
Competitive advantage through collaboration
Business networks deliver value across several key areas, including:
- Speed to market
Multitiered visibility tools help you identify and take steps to mitigate points of friction across your extended value chain. By quickly addressing issues and avoiding delays, you can achieve the short production cycles needed to get new tech devices to market quickly and cost effectively, helping you meet revenue and profit targets.
- Supply resilience
Thanks to better collaboration across your supply chain, you get early warnings of potential disruptions that may impact your production processes, such as shortages of a particular component or raw material. This allows you to act in an agile way to adjust production schedules or find alternative sources of supply to help ensure you can still meet order delivery commitments.
Business networks support a dynamic sourcing approach that helps you move quickly to develop new products and capabilities. The ability to connect and collaborate closely across a wide and diverse network of suppliers means you can take advantage of new business opportunities in a timely way, bringing innovative technology offerings to market faster.
Digital information sharing using a business network enables you to track sustainability data in real time. In-depth visibility of key sustainability metrics such as total carbon footprint across your extended high tech ecosystem means you can identify issues and pinpoint areas for improvement. And ultimately, this transparency enables you to achieve your sustainability goals in an efficient and cost-effective way.
What could a business network do for your high tech business?
Visit us online to learn more about how SAP Business Network can help you create a more agile, resilient, and sustainable supply chain.