Reaching the Eureka Moment on Building Supply Chain Agility

Before the pandemic, few people really understood the importance of an efficient supply chain. But all that changed when they suddenly began facing shortages and disruptions in obtaining even the most common household supplies like toilet paper.

For businesses that were unexpectedly hit with demand volatility, supplier uncertainty, raw materials shortages, disruption and delays in logistics, worker shortages and more, the pandemic wasn’t just an inconvenience. It was a bona fide nightmare.

And all this led to a “eureka” moment. It dawned on many of us simultaneously: maybe, just maybe, our supply chains were not as agile and responsive as they could be. With the global crisis highlighting the weaknesses of supply chain management traditional information flows, perhaps we could get greater value by integrating our supply chains.

This caused many of us to take another look at our SAP ERP system, with its ability to integrate shop floor systems such as production, warehouse management, quality control and maintenance, and business intelligence systems. By optimizing this end-to-end integration, we can rely on a single proven source for keeping records and gaining information and insights.

Once we ensure that the data collected is working in synchronicity with the data structures in SAP– and that we are working with a single source of truth instead of falling back on siloed systems and behavior we can begin to tackle proper process integration. But first, we must ensure our master data is accurate, relevant, and aligned with strategic needs.

This master data is the fuel that keeps SAP running strong to help companies gain greater visibility into their inventory levels and movements. With greater visibility comes better balancing of demand and supply. Production planning is more on target. System warehouse management becomes more efficient and cost-effective. Plant maintenance is performed without disruption of the production schedule. And so forth. With all these different business processes being run by a single SAP system, the need for third-party software goes away, manual work is reduced, and the entire supply chain is optimized.

Once we become comfortable with using SAP as a single source for accurate data, silos disappear, and each department begin to understand the value of other supply chain functions and how their own work is integrated into the big picture. That leads to quick response when there is a problem. Rather than trying to fix an issue in a vacuum not knowing what the solution will mean downstream were the data dictates the best organizational decision. The result is an agile supply chain that is ready for anything.

But just creating an end-to-end integrated ERP system is not enough. Another vital part of the success equation is people who not only know about system functionality, but also possess a clear understanding about the various supply chain functions and how they interplay with each other.

Committing to the goal of continuous integrated improvement, processes and technology must be backed with people who are equipped with the education, skills, and value-focused behaviors. Each team member must be aware of the various supply chain functionalities and SAP’s capabilities and should demonstrate agility in reacting to demands based on market needs. For that, confident decision-making is necessary along with trust in the master data.

It is not enough to merely teach the members of the SAP-focused supply chain team about the data and SAP's capabilities. Instead, they must be trained and reinforced to put new knowledge to use, integrate the resulting insights swiftly, receive immediate feedback on their choices, and produce results.

When we truly trust SAP’s capabilities, data and with investment in supply chain education for team members, we are well on our way to being robust and agile. As a result, our supply chain is primed to be responsive and flexible to any disruptions that come its way.