Why SAP Supply Chain Solutions Could Transform Manufacturing

Accurate real-time information is proving crucial to helping suppliers, manufacturers and distributors around the world mitigate ongoing disruption. 

Businesses are already adamant that AI has a big part to play in this space, with the main benefit perceived as cost savings (60%), logistics improvement (56%), contingency planning (53%) and enhanced inventory management (50%), according to new research from SAP UKI. 

However, this research also highlights that firms are increasingly recognising AI's potential to transform their entire supply chain operations and drive efficiency by plugging skills gaps, among other things. 

Little wonder, then, that SAP is harnessing the power of AI in its supply chain solutions to unleash a transformative wave of productivity, efficiency and precision in manufacturing.

AI-driven insights from real-time data look set to help companies optimise decisions across their supply chains, streamline product development and improve manufacturing efficiency. 

Navigating supply chain disruption

Demand for supply chain resiliency has surged following a series of disruptions to global trade in recent years – most notably the COVID-19 pandemic, the blockage of the Suez Canal and conflict in Ukraine and the Middle East. 

This, in conjunction with highly-publicised shortages of goods, from microchips to vegetable oil, means supply chain issues continue to take centre stage in boardroom discussions.

Steps have, of course, been taken to address these challenges, but disruptions continue to have a significant impact. Almost three in five (59%) organisations are facing production delays, 55% are suffering decreased revenues and almost half (46%) are losing customers, according to SAP’s latest research. 

“Traditional supply chain management processes are not fit for purpose to address the volume and variety of disruption that exists today,” comments Ryan Poggi, Managing Director at SAP UKI. “Future AI innovation, especially generative AI, will change this and is the greatest opportunity since the rise of cloud."

“The benefits are so big it has triggered a race for executives to quickly develop plans to create AI-enabled value across their organisation. But, as leaders, we have a responsibility to ensure our businesses use AI responsibly to help transform companies faster than ever.

“Supply chains are generally low risk, so are a great place to start. Now is the time to embrace AI ethically and leverage company data to make your business much more resilient now and in the future.”

SAP supports risk-resilient manufacturing

SMA Solar is among the SAP customers already witnessing the benefits of its AI-powered supply chain solutions.

These include an approximate 15% increase in supply chain workforce productivity, a 10% decrease in overall supply chain planning costs and a 10% reduction in inventory carrying costs and stock turnover rate. 

“SMA Solar modernises its manufacturing execution systems to support sustainable, risk-resilient manufacturing operations with the power of AI-enabled visual inspection in the SAP Digital Manufacturing solution,” explains Heiko Kehm, SMA Solar Head of IT Order to Cash. 

Supporting AI-centric strategies

Key improvements to SAP’s supply chain solutions are also supporting companies’ AI-centric strategies in the following ways:

• Optimising decisions with AI-driven insights: Companies can leverage higher volumes of machine data and integrate AI-driven visual inspection by computer into their production processes, enabling an increase in quality through automation. 
• Streamlining product development: Product developers can use SAP’s AI copilot, Joule, to gather and enhance new product ideas quickly and effectively using natural language queries.
• Detecting equipment anomalies: Using AI, asset operators can proactively address potential breakdowns based on sensor data collected from smart devices and edge gateways. This utilises the cutting-edge Cumulocity IoT platform from Software AG.
• Improving field response: Customers can optimise driving routes and allocate job assignments efficiently with integrated real-time traffic data and ML-trained models, enabling the right field service technicians to reach their destinations on time. 

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