Embark on the Journey From Supply Chain Disruption to Supply Chain Collaboration
- May 04, 2022
Companies have increasingly embraced the Software-as-a-Service model. The growing popularity of SaaS is quickly evolving and replacing the typical mindset that favors on-premises data centers. As a result, this attracts newer customer acquisition channels that make flexible billing solutions imperative for competitive global organizations. The realization is kicking in and is no longer applicable to direct-to-consumer companies alone but to retailers and manufacturers, who are deploying subscription-based services to suit customer needs.
Supply chain practices across organizations are looking for ways to connect the dots in uncharted territories that previously posed limitations. This supply chain evolution aims to maximize the overall value generated. The best way to define the final value that a supply chain generates is to take the differential between the final product value derived by the end consumer and the cost involved in meeting the consumer’s demand. The differentiation lies in strategic supplier management and development that creates a world-class supply base. The key is visibility into supply chain inventory and the ability to deliver perfect orders to customers. Using tools such as those within SAP Ariba makes it easier to optimize readiness to take on any challenges that come with supply chain disruption.
Moreover, globalization in the worldwide supply chain network over the past two decades has faced many complications from disparate systems working in silos. It has been extremely demanding for organizations to scale collaboration amongst global teams such that there’s end-to-end transparency spanning across organizations and geographies. Add in a global pandemic that disrupts everything we’ve built and known from top to bottom, and even an optimist’s outlook will deflate. Thankfully, SaaS systems such as SAP Ariba—which offer the next generation of cloud e-procurement solutions—can help tackle the seemingly impossible. Now, cutting-edge supplier performance and risk management tools to control disruption within your upstream and downstream channels are readily available at our fingertips. With real-time visibility among the supply chain, disruptions are noticed much quicker, and Ariba’s expansive network of awarded vendors is available to fill gaps quickly. With automated processes and an intuitive UI, employees can save time on tedious tasks, thus benefiting employers concerned about TCO.
SAP Ariba Supply Chain Collaboration, used in conjunction with electronically integrated trading partners over the Ariba network, can substantially reduce lead times. Longer lead times can add 20 – 30% product cost. For every five days of lead time reduction, organizations can reduce one day of safety stock. An estimated 60% of organizations are not using any procurement and supplier management tools. This scarcity translates to the fact that most supply chains in our modern world economy are not close to the maturation of being digitized in an ultra-competitive and constantly evolving landscape.
An additional cost reduction component of SAP Ariba Supply Chain Collaboration is how Transportation Management is integrated into the Logistics Business Network at SAP. When you factor in transportation, the total product cost can exceed 15% of the value of a product when mismanaged. This is a common occurrence due to a lack of proactive planning with your direct suppliers and the inability to quickly source additional efforts in a timely fashion to fulfill orders.
Enable seamless direct materials procurement with cloud-based collaboration through the best-in-class supply chain SaaS tools combined with our expertise in developing world-class solutions to help your business thrive in these unpredictable times.