Monday, September 22, 2014

SAP's Collaborative Supply Chain

This week, SAP announced cloud-based software that will help different organizations interact and manage their supply chains.  The goal of the platform is to encourage collaboration, while simplifying interactions and tracking inventory efficiently.  SAP Supply Chain Orchestration is partnered with Ariba Collaborative Supply Chain to enable companies to communicate most effectively to deliver their products in the most seamless process possible.

Herein lies the big advantage with the platform: communication.  Businesses, particularly product-based manufacturing businesses, rely heavily on efficient communication to initiate orders, track inventory and the manufacturing process, and distributing between different physical locations.  Each party needs to know at what point in the process others are, deadlines and progress towards them, any potential roadblocks or delays, and a point of contact at each position.  The success of the operation as a whole boils down to communication between the stations to make sure they are all on the same page in working towards their goal.

SAP's cloud-based software fulfills this need well.  The software enables complete visibility into each party's resources, and makes it easy to track direct materials among the suppliers.  All of the needed paperwork and agreements are online, such as order confirmations, scheduling agreement releases, and goods receipts notices.  It's also possible to schedule automation when stock is low, or to reorder goods on a scheduled or as-needed basis.

Other benefits of the cloud-based system include:
  • reduced inventory
  • improved process efficiency
  • greater compliance and risk management
  • optimized cash flow across the supply chain
Partnering with the Ariba Network was a key strategic move by SAP.  Rather than taking the time to develop their own infrastructure, SAP was able to use the resources and existing advantages of one of the world's largest global trading platforms.  Companies will be able to collaborate with their suppliers across multi-tier supply chains, and SAP can focus on their strength: software.

The cloud-based system seems to be the way of the future.  By making any and all information available to any party involved, complete transparency allows the most effective communication.  As inventory is kept in real time, it's easy for supply chain managers to track what is available at various locations and schedule ordering and delivery of goods accordingly.  A cloud-based system also creates a central communication hub for interactive planning.  It's comparable to how students are using Google Docs to collaborate on writing papers for school.  Anyone can track progress, make edits or adjustments, and communicate.  Keeping everything in one system facilitates scheduling improvement, simplifies logistics, and may offer new insights to quality and process improvements.  In the future, there will be a massive shift towards cloud-based solutions, as it has the potential for a dramatic jump in the way supply chains manage their operations.

Works consulted:

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