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How to future-proof your supply chain through digital intelligence

Digital Intelligence

Darcy MacClaren, Chief Revenue Officer, SAP Digital Supply Chain explains exclusively to PASA how to future-proof your supply chain through digital intelligence in an increasingly competitive and ever-changing environment.

Effective supply chain management has long been crucial for organisational success, however traditional and manual strategies are no longer sufficient.

An increasingly competitive and ever-changing environment driven by rising costs, geopolitical tensions, a changing climate and challenging labour market raises an important question for supply chain professionals: how can organisations successfully address key supply chain challenges when it is more difficult than ever to predict what lies around the corner?

For all organisations it starts with adopting a digital mindset, whereby data is used to derive insights from across the supply chain and help to make more informed decisions. 

In this article, I’ll highlight the importance of a digital mindset and why those organisations that embrace it are better placed to tackle today’s supply chain challenges.

Navigating disruption through digital intelligence

With an ever-changing operating environment, digitalising manual processes is essential to building supply chain resilience. 

By using technologies like automation and artificial intelligence, which can be applied to multiple facets of the supply chain including planning, manufacturing, logistics and customer service, organisations can enable operational efficiencies, reduce possible errors in the manufacture and distribution of goods, and free people to focus on more strategic tasks.

Not only do digital strategies enable organisations to empower their workforce through more meaningful work, they also offer process visibility through embedded data analytics. 

These insights can be used to identify bottlenecks, mitigate potential risks such as volatility in the market, and ensure data is readily available for stakeholders to act in real-time.

Take one of New Zealand’s largest companies, Fonterra Brands, which is using SAP’s Integrated Business Planning (IBP) solution to move away from manual data maintenance and improve its forecasting and collaboration abilities. 

By digitising its supply chain, it’s now able to analyse data at a much faster rate, engage in detailed simulation and scenario planning where the impact of changes can be seen instantly, and increase the agility of its current business planning and budgeting process so that its team can spend more time on value-added tasks.

Furthermore, digitising its processes has delivered a 20 percent reduction in short-dated dumps that would have been sent to landfill, resulting in cost savings and a more sustainable outcome for the environment.

Staying ahead of change with AI

There are countless conversations regarding the potential of artificial intelligence (AI), with many different claims regarding the value that it can deliver. 

But what can AI technologies really offer supply chains and what is the value of integrating this technology into your business processes?

One of the biggest advantages of using AI is the ability for organisations to create risk-resilient supply chains and prepare for change by using statistical forecasts that take into account multiple factors; from inventory levels and supply partner risk to weather changes and market fluctuations.

AI can also be used to optimise activities, including those related to schedule optimisation, sourcing external maintenance and service technicians (crowd service), self-service tools, augmented reality and more. 

For example, identifying dependencies between tasks to reduce delays during scheduled maintenance, and reducing travel time for maintenance and service technicians through predictive route planning which would otherwise be a lengthy and tedious process.

Take water heater manufacturer, Rheem, who provides water heater products for millions of homes. It’s using SAP Field Service Management to automate scheduling and enable more-accurate tracking of its field service activities. 

As a result, it’s seeing the same number of tasks generate higher revenue but completed with less labour and travel.

The rise of the digital co-worker

As AI integrates into all aspects of business processes, it shouldn’t be feared. Instead, think of AI as a co-worker for each of your employees. One that helps people get work done faster and drives better business outcomes.

At SAP, we recently announced Joule, a natural-language, generative AI copilot that is being integrated into SAP’s cloud enterprise portfolio including digital supply chain. 

Joule enables employees to ask a question in plain language and receive intelligent answers drawn from the wealth of data across a business for quick assistance related to demand planning and insights on forecast, for example.

There is no doubt that AI will be a powerful tool for organisations; one that can help them derive immense value and remain competitive in the future, but organisations need to ensure data privacy standards are met and robust governance structures are in place. 

When an effective balance between human capability and technology is struck, organisations can realise their true potential.

So, what’s next? Open your digital mindset to see how AI could facilitate your supply chain processes.

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