My wife works in Supply Chain for a multinational corporation and during the covid-19 lockdown where most of us had to work from home, I was able to see the challenges she was daily facing such as; what is the status of the delivery? has it been shipped from the production site? why hasn't it departed the warehouse? can we expedite the delivery? when will it arrive? and so on. The amount of effort she had to put in to get answers was significant. On many occasions, she had to export data from multiple systems and consolidate, filter out, and analyze the data in spreadsheets. In other cases, she had to call manufacturing, the warehouse, the carrier, the account owner, and even the customer just to get insight into the status of sales orders, deliveries, and activities.
Every time she faced these challenges, one phrase was always whispered: "If I could just have real-time visibility into the entire supply chain process, I would get quicker answers and we would be more efficient and agile". This is just one example but it makes us realize how essential is to:
- Have a supply chain digitalization strategy
- Optimize the whole supply chain and not individual siloes
- Have end-to-end visibility
We live now in a digital world where real-time information is required to make decisions faster and better than ever before. Supply chain organizations that are still siloed structured and lack integration between lines of businesses, simply cannot cope with the rapidly changing business landscape. What is needed is a new end-to-end supply chain that is agile and responsive enough to meet the ever-changing needs of the business.
From a software point of view, we see how companies invest and put efforts to improve and optimize each step via digitalizing functions and activities, however, these efforts are still in a siloed approach and a process disruption could happen in the interdependencies between lines of business. This cause that, inefficiencies – or even optimization efforts - at one stage results in a cascade of inefficiencies down the line. Part of a supply chain digitalization strategy is to realize that close collaboration between lines of business is needed, thus making it mandatory to have lines of business be digitally connected, coordinated, and operated as a digital ecosystem, thus providing end-to-end interoperability that will allow all stakeholders to collectively drive for the best business outcome.
Another big challenge is that lines of businesses have their own objectives and KPIs, which might not be in full alignment with the objectives of other lines of business. For example, sales are usually driven by short-term objectives such as maximizing revenue and market share, while supply chain focuses on long-term optimization of inventory levels, supply chain cost, and resource utilization. Or for example, manufacturing is looking to minimize costs by maximizing plant utilization, thus in many cases overstocking, while logistics is trying to keep inventory levels as low as possible to reduce working capital requirements. All these examples can lead to sub-optimization and supply chain inefficiencies.
Lastly, too often supply chain decisions are made based data that is not integrated and with information that is not accurate or up to date. This can lead to sub-optimal decisions with a negative impact. Lines of business could be digitalized and business processes could be fully integrated but still, real-time visibility into the end-to-end supply chain process is needed to make the right decisions at the right time. Organizations need applications that can provide a complete and accurate view of the end-to-end supply chain in real-time.
SAP Design to Operate (D2O) aims to provide organizations with the visibility and agility they need to thrive in today's dynamic business environment by offering fully integrated and interoperable supply chain applications that will help automate business processes, optimally synchronize operations and provide all the necessary data to get insights into the end-to-end supply chain operations. With this, organizations can better identify or even anticipate issues and bottlenecks early on, and make necessary adjustments in a synchronized way to avoid disruptions further down the line. It also enables collaboration across the supply chain network and allows all stakeholders to work together towards common goals.
With SAP D2O, organizations can achieve true end-to-end supply chain visibility and optimize their operations for maximum efficiency, assisted with real-time analytics that will help businesses make better decisions, better assess supply chain trade-offs and better understand the root cause of supply chain disruptions. In Summary, SAP D2O can help to:
Increase efficiency: By having visibility of the entire supply chain, businesses can identify potential issues, bottlenecks, and inefficiencies and make necessary changes to improve efficiency.
Increase agility: The ability to see the whole supply chain allows businesses to quickly adapt to changes in demand or supply.
Improve decision making: With visibility of the entire supply chain, businesses can make informed decisions about where to allocate resources and how to best meet customer needs.
If you’d like to learn how you can benefit from SAP D2O, please contact the local SAP Office or your account executive. Our team of experts would be happy to show you how our software can help optimize your supply chain and improve end-to-end visibility. Thank you for reading!
For more information on SAP D2O visit the following links:
SAP Supply Chain Management
SAP D2O Introductory Video
SAP D2O Video Teaser (30 sec.)
SAP D2O: Walk along the value stream (30 min video)
SAP D2O Highlights at Hannover Messe 2022 (3 min video)
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