How Midsize Companies Build Supply Chain Resilienc...
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Watching how language evolves and shapes people's mindsets, priorities, and attitudes can be fun for fans of wordplay and slang. And we're definitely seeing such shifts in American English, as Merriam-Webster added a staggering 370 words to its dictionary a few months ago.
The same can be said for supply chain organizations of midsize companies. For years, words such as "profitability," "costs," and "efficiency" routinely came up in everyday conversation. But now, "resiliency" and "sustainability" are increasingly finding their way into supply chain leaders' daily vocabulary, too – impacting most initiatives, objectives, and long-range strategies.
Finding the right balance between resiliency and sustainability is not only about decreasing the environmental impact of supply chains. It's also about increasing operational efficiency, improving profitability, and keeping costs low.
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According to the SAP Insights research center, surveyed midsize organizations are including supply chain resiliency and sustainability in their improvement strategies for profitable revenue growth, efficiency, and mitigation of risks such as soaring costs. This shift in strategy is expanding their focus on other areas, including supply chain dependability and strength, cost control and spend management, less reliance on scarce resources, and product, service, and operational sustainability.
Finding a clear edge in the cloud
Over the past decade, cloud technology has become critical in how midsize companies transform themselves and their industry. For example, distributors have used the deployment environment to change how companies and people buy products and save money. Meanwhile, utilities provide greener energy services and improved retail experiences. Even component suppliers in the automotive industry have launched new personalization services for customer safety and infotainment in the cloud.
It's no wonder 83% of midsize business leaders who responded to the global survey from SAP Insights consider the cloud critical to business process improvement. Yet the real news is the cloud-based applications their organizations are using to deliver on the promises of a more-resilient and sustainable supply chain.
Initially, cybersecurity infrastructure and automated business intelligence dashboards have risen to the top of cloud investments. And for a good reason: they're immediately available through the public cloud provider's service-level agreement and initial offering. These functionalities introduced organizations to a new world of digital flexibility, fast innovation, data management, and full visibility – all with the confidence that the system is safe from cyberattacks and breaches.
Now, supply chain functions are expanding their use of the cloud by digitizing their end-to-end supply chain – creating a much more unified ecosystem for their internal teams and external vendors, partners, and customers. In addition, they leverage employee collaboration tools, business process intelligence, and AI capabilities such as robotic process automation, machine learning, blockchain distributed ledgers, and human-computer interaction.
Driving value through a unified experience
While there's an abundance of niche solutions on the market, the value of advanced cloud capabilities is best realized when integrating them into a unified solution.
Kallpa Generación S.A., part of Inkia Energy Limited, is a prime example of a midsize business using integrated cloud technologies as the foundation for supply chain visibility and control. The Peruvian generator of hydroelectric and thermoelectric power and producer of hydrocarbons chose a scalable, AI-embedded cloud ERP to accelerate its business growth while staying compliant with regulatory requirements. With access to advanced capabilities that reduce complexity, facilitate compliance and data traceability, and improve visibility and reporting, the company captured synergies that fuel their expansion while increasing order-to-payment efficiency by 40%.
Zinus Inc., on the other hand, is betting on the cloud to revolutionize its e-commerce experience with unified planning processes. The South Korean mattress and furniture distributor moved from spreadsheet-based planning to a cloud-based integrated planning system that automates statistical forecasts and real-time simulations. With an integrated platform for supply chain planning, Zinus is now taking advantage of cross-departmental collaboration – enabling employees to make better decisions using real-time insights gained through a single source of truth.
Smart Press Shop GmbH & Co. KG, a joint venture between Porsche AG and Schuler Group GmbH, is also enjoying the benefits of the cloud. The automotive body-parts manufacturer adopted a cloud-first development strategy – complete with ERP and manufacturing execution systems – to digitalize production, allowing it to run entirely in the cloud using 100% green energy. The more-modern cloud architecture and user interface led to 100% production traceability from raw materials to finished parts and entirely paperless production processes.
Evolving toward a more resilient, sustainable future
Finding the right balance between resiliency and sustainability is not only about decreasing the environmental impact of supply chains. It's also about increasing operational efficiency, improving profitability, and keeping costs low.
And midsize businesses can achieve that balance by using various advanced digital capabilities in an integrated cloud solution. Together, their internal and external groups can collaborate as one ecosystem – with a shared understanding of expectations, the move forward, and best practices for mitigating systematic risks.
