SAP: Why we can no longer blame supply chain disruption on the pandemic

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The automotive and smartphone industries are some of the hardest hit sectors when it comes to global supply chain issues. For the past two years it’s been easy to blame the pandemic, but the reality is the pandemic only exposed existing problems. And businesses have realised that the traditional, linear supply chain is dead.

Fractured supply chains are not the byproduct of external events that cannot be planned for, but rather the result of a culmination of factors including a lack of visibility, global value misalignment and outdated technology.

We spoke to Chris Willcocks, Vice President and Head intelligent spend management at SAP Australia and New Zealand, who explains solutions to how we overcome this long-standing supply chain disruption.

Visibility is core to managing disruption

A 2021 report by International Data Corporation (IDC) shows supply chain visibility remains largely aspirational for most organisations with 98% of companies working on improving their overall supply chain visibility.
Business networks can offer a solution to supply chain visibility as they can offer businesses a full view – in one place – of the all the comings and goings that make up their supply chain, including interactions of trading partners.
This visibility will help unlock information that can help organisations streamline processes, drive value, and address challenges in real-time as they arise. Businesses will then be able to connect and collaborate with their trading partners, share information, and plan together as a single ecosystem on how to combat future supply chain disruptions.

Increased focus on Environmental, Social and Governance (ESG) Goals

Consumers have become more conscious of the social impact their purchasing decisions have on the environment, so companies must now make the effort to select suppliers who can help them achieve their own ESG goals. Today’s businesses must be able to demonstrate high ethical and environmental standards and they must be able to verify that their suppliers’ operations – and even those of their suppliers’ suppliers –apply the same high standards.
Cooperation across companies and the global value chain is precisely what is required for designing ethical supply chains and ensuring there is limited disruption to business if values among partners misalign. If the performance of existing supply chain partners does not align with a business’ values, business networks driven by digitalisation can not only help quickly discover new and more sustainable partners, but also ensure a smooth transition to partners who mirror their ethics.

Digitalisation is key to unlocking smarter decisions

What the pandemic did was accelerate the urgent need to update and upgrade supply chains to the 21st century. By digitalising the supply chain, businesses can leverage real-time data and predictive analytics to address current vulnerabilities, increase the agility of their supply chain, and stay future proof.
Additionally, companies can view historical data to identify trends, track KPIs, and benchmark with industry peers.
Such intelligence produced can be used to anticipate supply chain issues that may arise and avoid unnecessary costs and delays. When organisations can collaborate in real-time, and work in parallel, the customer service is also enhanced.
It’s not without investment in a digital business network that ultimately can help businesses regain control of their supply chain and improve overall resilience and agility. It will also enable organisations to streamline processes, drive value, address challenges as they arise, respond to customer insights, and create more effective and efficient businesses.

About Author

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Chris Willcocks is Vice President and Head intelligent spend management at SAP Australia and New Zealand.

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