In the foreseeable future, supply chains face two significant disruptions:
An overriding issue compounding these challenges is the imperative for organizations to innovate in response to market and technological advancements. This blog explores how to achieve agility and resilience in this ever-changing environment.
Contrary to popular belief, technology alone does not determine supply chain agility and resilience. The key lies in your people and processes. Technology, particularly decision support solutions, can enable and enhance the effectiveness of your team and processes, but it is not the sole factor. Even the best demand, supply, or response plans fall short if they are not seamlessly integrated with finance, manufacturing, logistics, and ultimately the customer experience. Integration isn’t the issue, its operating in a shared context.
AI, Generative AI, and Machine Learning thrive on data. Organizations must understand that the most valuable data is either owned or subscribed to, and solutions not native to your transaction backbone will struggle to deliver value. Master data governance is critical for maintaining good supply chain hygiene and ensuring the effectiveness of AI-driven solutions. Further, with GDPR Europe led the privacy rights movement around personal data, and the major news organizations, among others, have demonstrated their litigious backbone to recognize the value of their data to train Large Language Models (LLM), which are the foundation for Generative AI.
My journey in the supply chain industry began in 1994 when I sold my first planning and scheduling solution at Numetrix, a company leveraging optimization and heuristics for process manufacturers. Fast forward to 2005, and I encountered a prospect who wanted to purchase the supply chain technology I was selling then. When I asked how they were running the business before they said they were using, surprise, my old solution, but said it didn’t work for them and they needed something new. What they did not realize is that every solution (applications and toolkits) uses the same core technologies (some or all); optimization, heuristics, and statistics for forecasting.
This experience highlighted what became a recurring theme since then…companies investing in one solution, which falls out of favor, or loses an exec sponsor, and they spend good dollars on the same solution with different wrapping: the obsession with ‘Bright, Shiny Objects’—the latest, most attractive applications promising to solve pressing business needs.
Major analysts often promote these solutions through their magic quadrants, waves, etc; encouraging organizations to invest in the latest trends. However, this pursuit can lead companies down a costly rabbit hole.
In 2013, I joined SAP because I recognized the value of a platform approach with a solution lifespan extending into decades, providing a viable alternative to chasing 'bright, shiny objects' and enabling sustained success through people and process leverage. While there will always be innovation on the edges of established practices, something that keeps expanding the breadth of automation, its important to maintain a clean core platform that can accept innovations as they are available and relevant to the business. Its with this mind that whether you adhere to an SAP strategy or another, trying to ‘assemble’ something so critical to your business will always result in an environment that is costly to maintain and its only consistency is the disappointment it brings in business value.
When SAP reengineered their supply chain strategy as part of the SAP S4 platform they committed to the critical importance of a supply chain platform that would enable extended business processes your people need to achieve the agility and risk-resilience required to succeed with the unknown disruptions yet to come. This platform approach is much more than integration, which is an over-used and over-relied upon approach. You can ‘integrate’ a toaster to your internet, its not going to make better toast. Context is what is critical, SAP solutions operate in a shared context, this is the power of the platform.
The past five years have brought unprecedented changes, from the COVID-19 pandemic and shipping issues to the Russian invasion of Ukraine and geopolitical power shifts. These disruptions underscore the need for a robust supply chain strategy.
In times of disruption, leaders have the opportunity to capture new opportunities and thrive. Let's embrace agility and resilience to navigate the complexities of the modern supply chain landscape.
In Disruption, Leaders Thrive – Capture the Opportunity.
At ArchLynk, we implement the core of supply chain planning and execution on the SAP enterprise platform. SAP’s new partnership with DataBricks ensures all data, whether native or subscribed, can be normalized (contextualized) to power AI technologies. This collaboration delivers the data (ie Fuel) for SAP’s AI innovations to have the greatest impact across your enterprise. The SAP Business Technology Platform (BTP) offers high-value extensions and third-party capabilities, so you can leverage SAP’s innovations while also enabling those other innovations for your competitive advantage in the face of ongoing disruptions
