Future of Sourcing - SAP https://futureofsourcing.com/tags/sap en Do You Want Chips With That? https://futureofsourcing.com/do-you-want-chips-with-that <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Do%20You%20Want%20Chips%20With%20That.jpg"><a href="https://futureofsourcing.com/sites/default/files/articles/Do%20You%20Want%20Chips%20With%20That.jpg" title="While the shortage of semiconductor chips has been dominating news headlines and roiling corporate earnings, demand for chips has been steadily increasing prior the the COVID-19 pandemic." class="colorbox" rel="gallery-node-2139-lJAMPcADVdQ"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Do%20You%20Want%20Chips%20With%20That.jpg?itok=nRUz0d6q" width="624" height="325" alt="While the shortage of semiconductor chips has been dominating news headlines and roiling corporate earnings, demand for chips has been steadily increasing prior the the COVID-19 pandemic." title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <p><em>While the shortage of semiconductor chips has been dominating news headlines and roiling corporate earnings, demand for chips has been steadily increasing prior the COVID-19 pandemic. In this article,&nbsp;Baber Farooq, Senior Vice President, Head of Product Strategy, Procurement Solutions, SAP, and Gordon Donovan, Intelligent Spend Evangelist, SAP, identify the multiple factors that have led to the current crisis, discuss how we got here, and suggest how procurement and supply chain leaders can seek to avoid these types of events in the future.</em></p> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/successful-digital-transformation-requires-an-inspection-of-all-business-processes">Successful Digital Transformation Requires an Inspection of all Business Processes</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The semiconductor industry has an atypical problem: <em>everybody wants their product</em>. Semiconductor chips are the basic component of the digital products used in our everyday lives, from mobile phones to televisions to washing machines, but it doesn&rsquo;t end with consumer products. As many as 169 industries have been impacted by the current mismatch in demand and supply.</p> <p>The effect on car makers has been widely reported, with several carmakers temporarily shutting down plants or announcing delays in production which drastically impacts their earnings. Some car lines have announced the elimination of high-end services requiring chips in systems like navigation and intelligent monitoring just to keep business going. &nbsp;</p> <p>While the pandemic has not helped matters, it is not the root of the problem. Even prior to COVID-19, demand patterns were increasing for many reasons, including the emergence of 5G, automakers prioritizing electric vehicles, and the drive for ubiquitous internet access. These and countless more reasons led to an increase in the number of internet-connected devices that rely on semiconductors.</p> <p>This article identifies multiple factors that have led to the current crisis, discusses how we got here, and suggests how procurement and supply chain leaders can seek to avoid these types of events in the future.</p> <h1>First, the Issues</h1> <h2>COVID-19</h2> <p>The chip shortage has been building since late 2020 due to multiple supply chain disruptions. The pandemic initially caused a drop in vehicle sales in the spring of 2020, leading automakers to cut orders of the chips needed for functions ranging from touchscreen displays to collision-avoidance systems. &nbsp;</p> <p>When demand for passenger vehicles rebounded sooner than expected, chip manufacturers had already committed to supplying their big consumer electronics and IT customers, which had seen a huge increase in demand due to more employees working from home and children home schooling via virtual classes.</p> <p><img alt="The long wait for semiconductor chips." src="https://futureofsourcing.com/sites/default/files/Semiconductor-Chips-SAP.png" style="width: 688px; height: 373px;" /></p> <p>These factors had a significant impact on the demand for laptops, tablets, screens and more. In Q4 2020, computer sales increased 26% over the previous year.&nbsp;</p> <p>CC Wei, CEO of Taiwan Semiconductor Manufacturing Company (TSMC) stated in April, &ldquo;We are witnessing a structural increase in underlying semiconductor demand as a multi-year megatrend of 5G and HPC-related applications are expected to fuel strong demand for our advanced technologies in the next several years. Covid-19 has also fundamentally accelerated the digital transformation, making semiconductors more pervasive and essential in people&#39;s lives.&rdquo;</p> <p>This is great news for semiconductor manufacturers, but worldwide lockdowns led to the shutdown of chip production facilities causing stock to drain. Just as the world started to return to a new normal state, the delta variant hit South East Asia especially hard, preventing manufacturers from getting back to full production capacity at the pace required to catch up.</p> <h2>Geopolitical Issues</h2> <p>In the 1990s, 37% of chips were made in U.S. factories. By 2020 that number had declined to just 12% with China emerging as the new leader in chip production. Rising tensions between East and West compounded this issue for Americans. Sales of semiconductors to Chinese firms were restricted by the U.S. and those companies began stockpiling chips from other providers essential to 5G smartphones and other products.</p> <p>At the same time, U.S. firms were cut off from chips made by China&rsquo;s Semiconductor Manufacturing International Corporation (SMIC) after the firm was blacklisted by the federal government.</p> <p>American automakers and medical device manufacturers have asked the U.S. government to subsidize construction of new domestic semiconductor manufacturing facilities. The government also plans to conduct a supply chain review of &ldquo;critical and essential goods&rdquo; to ensure proper measures are taken to manage this crisis and reliance on Chinese manufacturers.</p> <p>Beyond the U.S., there is a rising effort to increase production from all corners of the world. The European Union (EU) has set a target to double its output by 2030. In 2020 it made 10% of the world&rsquo;s chips. But 2030 is a long time off in the world of technology.</p> <p>Even TSMC, currently the world&rsquo;s largest semiconductor manufacturer, has increased its 2021 capital spending budget to U.S. $28 billion and is investing $100bn over the next three years to address the shortages. The problem is that the effects of these investments will take time, as there are no &ldquo;quick fixes&rdquo; to remedy this issue.</p> <h2>Extreme Events</h2> <p>What seems to be continuous weather events have also added to the issue. A huge winter storm in Texas shut down semiconductor factories. Taiwan experienced its worst drought in more than half a century, leading to problems among chip manufacturers located there that require large amounts of ultra-pure water in their factories and clean rooms.</p> <p>There are unforeseen events that also play a role. Last year a fire at a Japanese factory cut off the supply of a special fiberglass used in printed circuit boards. Earlier this year a fire at Renesas, one of the world&rsquo;s largest chip manufacturers, deeply impacted its production and it has taken much longer than expected to ramp back up.</p> <h2>Logistics</h2> <p>The Suez Canal blockage in March 2021, the lingering COVID outbreak and the shutdown of Yantian (one of the world&rsquo;s busiest ports) inevitably resulted in significant shipping delays. Shortages of shipping containers resulted in companies having to pay premiums for shipping. <em>The Wall Street Journal</em> recently reported that the price of shipping a 40-foot container to the West Coast of the U.S. has jumped 63% since the start of the year to $6,341 according to the Feigtos Baltic Index. This is more than three times the price from the previous year.&nbsp;</p> <p>Outrageous shipping costs such as these have driven demand toward airfreight, which was already taxed with high demand due to global shipments of the COVID-19 vaccine. In addition, capacity had been reduced due to the pandemic-related drop in passenger travel, meaning that there are fewer planes available to carry freight.</p> <p>In fact, global air cargo capacity in the first quarter of 2021 is 25% less than last year. Factor in the grounding of the Boeing 777 fleet due to engine failures, and you have severe capacity constraints.</p> <h2>Talent</h2> <p>A 2017 survey of U.S. semiconductor manufacturers found that 77% experienced a talent deficit within the industry and 14% stated that by 2020 it would be critical. In Japan they are struggling to fill jobs that require expertise in AI, quantum computing and other advanced technologies.</p> <p>The Japanese government announced a one trillion-yen investment in the industry. Taiwan is investing hundreds of millions into universities to fill the talent shortage and South Korea is also investing heavily in the industry. As mentioned earlier, the EU wants to double its capacity and is investing accordingly.</p> <p>But this will take some time and won&rsquo;t solve the problem alone. China is struggling to fill 400,000 semiconductor engineering roles and the U.S., as part of its investment in the semiconductor industry, could create more than 12 million additional jobs through 2026.</p> <h2>Procurement</h2> <p>Many organizations have pursued an aggressive lean-inventory practice that has left manufacturers vulnerable. Agile businesses, mainly electronics manufacturers, that had visibility into the bigger picture and longstanding relationships with semiconductor manufacturers have been able to continue with their production, while other industries have been forced to slow down, or even shut down, certain plants. &nbsp;</p> <p>This supply base reduction has left many organizations without access to suppliers, as those relationships have been neglected.</p> <h1>What Are the Solutions?</h1> <p>Semiconductor suppliers are working to make up shortages at breakneck speed. From the buyer perspective, procurement functions need to have the ability to quickly and effectively, predict disruption in supply, and expand their supply base through a multi-supplier strategy to ensure alternate sources in these instances.</p> <h3>Treat Your Suppliers As Partners</h3> <p>It is all about relationships. Through an impactful supplier collaboration program, companies have an opportunity to remake themselves as extended enterprises, a model in which both their and their suppliers&rsquo; activities are so well aligned that they are able to avoid major supply chain disruptions, eliminate overlapping expenditures (including in R&amp;D), and ultimately become more innovative and efficient.</p> <p>Buyers and suppliers can take an integrated approach to supply chain optimization, aligning their processes to reduce waste and avoid redundant effort. Taking a network approach to supplier management provides the visibility required to engage multiple trading partners to collaborate on forecasting, planning, and capacity management &mdash; thereby improving service levels, mitigating risks, and strengthening the combined supply chain.</p> <h3>Expand Your Supply Base</h3> <p>Until now, the global supply chain has taken on big risks with just-in-time manufacturing and global supplier contracts to maximize returns. But from this current crisis we have seen that organizations following a supply base contraction strategy have generally suffered more than those who had established a more diverse supply base.</p> <p>In today&rsquo;s tenuous business environment, it is beneficial for procurement teams to pursue a multi-supplier strategy, especially for key components. This builds in more agility and rebalances the offshore, nearshore and onshore mix.</p> <p>According to a Deloitte CPO survey, nearly half (47%) of CPOs plan to expand their overall supply base. Of those who plan to expand, refining their geographic base was the top choice (31%), while a shift to nearshoring was the second choice (24%). Deloitte notes that companies are trying to reduce overreliance on a few suppliers in uncertain times, while also trying to locate suppliers closer to home to mitigate pandemic and international trade risk.</p> <h3>Technology</h3> <p>While the move to a multi-supplier strategy initially introduces more complexity, the benefits far outweigh the potential cost. The need then is for procurement to adopt technology to simplify the process and drive agility by choosing intelligent systems over inflexible and siloed systems. Organizations that embraced such technology and were further along in their digital transformation were the ones most able to adapt to the changes forced onto the global economy.</p> <p>Digitalization allows these systems to &ldquo;talk&rdquo; to each other, from identifying shortages to finding new sources of supply to reviewing forecasts and exchanging information with supply partners. This two-way information sharing between the buyer and its suppliers is necessary for aligning risk management strategies and demand-supply fluctuations.</p> <p>The need for procurement and supply chain leaders to understand the end-to-end supplier network and the risks that exist beyond their direct suppliers is essential. Driving visibility and transparency in the supply chain beyond tier one and into their second, third and fourth tiers is an essential part of managing supply chain risk. Only through a network approach can buyers fully achieve both that level of visibility and the ability to create the necessary communication flows to ensure a truly resilient supply chain.</p> <h1>Conclusion</h1> <p>As the world economic order continues to evolve and the fight against the pandemic rages on, governments and businesses will continue to be challenged with addressing supply disruptions in a manner that saves lives and dollars.</p> <p>Procurement teams must continue to evolve and to serve as the strategic partner that they are required to be &ndash; and in doing so, will most definitely have to rethink the rules.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/semiconductor-chips" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Semiconductor chips</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/sap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">SAP</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/supplier-management" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Management</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Do You Want Chips With That? - Future of Sourcing" addthis:url="https://futureofsourcing.com/do-you-want-chips-with-that"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Sun, 20 Feb 2022 18:01:41 +0000 Baber Farooq 2139 at https://futureofsourcing.com https://futureofsourcing.com/do-you-want-chips-with-that#comments The Future of Supplier Collaboration https://futureofsourcing.com/the-future-of-supplier-collaboration <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/The%20Future%20of%20Supplier%20Collaboration.png"><a href="https://futureofsourcing.com/sites/default/files/articles/The%20Future%20of%20Supplier%20Collaboration.png" title="The Future of Supplier Collaboration" class="colorbox" rel="gallery-node-1995-lJAMPcADVdQ"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/The%20Future%20of%20Supplier%20Collaboration.png?itok=2hjk042j" width="624" height="325" alt="The Future of Supplier Collaboration" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>The Future of Supplier Collaboration</h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/is-digital-transformation-procurements-secret-weapon-to-boosting-business-agility">Is digital transformation procurement’s secret weapon to boosting business agility?</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>Supply chain resiliency took on a new meaning in 2020. In the first few months of the pandemic, suppliers and procurement teams alike were left scrambling, desperately trying to maintain business continuity. The situation called for unprecedented levels of collaboration and visibility, which many organizations were not able to meet.</p> <p>New research from Oxford Economics and SAP provides an inside look into organizations&rsquo; ability to respond to supply chain disruption across the globe. Conducted in June 2020, Oxford Economics surveyed 1,000 procurement and supply chain executives, nearly 500 of whom are responsible for direct spend. The findings revealed a significant chasm in the way organizations manage spend and critical supplier relationships.</p> <p>Using detailed spreadsheets to manage supply chain issues involving trading partners is ineffective in managing real time supply chains. In times of economic uncertainty, even the most dependable supplier is at risk to abrupt, crippling issues. Over the past year, procurement and supply chain executives have learned that effective supplier collaboration requires transparent, real-time visibility into operational data, such as inventory levels, output capabilities and shipment status.</p> <p>Industry goal posts have moved significantly as a result, threatening the future viability of businesses across the supply chain. In response, procurement leaders are turning to digital business networks to level the playing field. Here are some factors organizations are considering as they prepare for a post-pandemic world.</p> <h2>Suppliers Graduate to Partners</h2> <p>Supply chain collaboration has taken a significant leap forward in the past decade, but the research revealed that many organizations still have significant room for improvement when it comes to collaborating with their direct spend suppliers. Less than 50% of organizations had visibility into a suppliers&rsquo; ability to meet demand. In a normal year, poor visibility into inventory levels or inbound shipment status typically leads to inconvenient, yet mostly innocuous delays. During a global pandemic, the consequences of poor visibility into a supplier relationship can break a supply chain and even shut businesses down.&nbsp; &nbsp;&nbsp;</p> <p>Ineffective collaboration is partly caused by a technology deficit and an unhealthy reliance on manual processes. According to the research, about one-third (32%) of executives said they still use phone, email and spreadsheets as their primary means of collaborating with external partners on key supply chain processes. While this manual method is no longer the industry standard, it highlights the gaps and inefficiencies that still exist across the global supply chain. Case in point: Only 26% of executives said their organization&rsquo;s collaboration with top suppliers is highly effective in remediating potential shortages or overages.</p> <p>Nevertheless, by isolating the companies in the survey that are further along on their digital transformation journeys and thus have more sophisticated supply chain processes, data shows a very different narrative unfolding. These &ldquo;leaders&rdquo; are building strategic partnerships with key suppliers that go far beyond the traditional transactional-focused relationship. For example, 76% of those leaders give critical suppliers visibility into future demand for their goods, versus 44% of others. This gives their suppliers the chance to better plan their own inventory needs. Transparency and digital capabilities can elevate the buyer-supplier relationship to a true symbiotic partnership.</p> <h2>Automate Everything</h2> <p>Without visibility and collaboration, buyer-supplier relationships are merely built on sand rather than a strong foundation. Leading organizations have established a technology infrastructure to automate and speed up transactions with suppliers and collaborate on key supply chain processes. Procurement technology today can automatically detect patterns in the data and flag exceptions, triggering certain actions to help remediate issues. It is this type of agility that was needed during the outbreak of the coronavirus, and what will be necessary to withstand any future disruption.</p> <p>Even the process of finding new trading partners can be time consuming and, frankly, mundane. With no easy way to discover suppliers with proper certifications and the right raw materials, at the right price, in the right geography, businesses expend a lot of time and energy before the onboarding process even begins. Alternatively, a digital trading partner network will help buyers find new sources of supply quickly and easily.</p> <h2>Join the Networked Economy</h2> <p>As global threats begin to dissipate and the economy rebuilds, procurement and supply chain executives still find themselves in uncharted territory. The further removed they are from supply chain intelligence, the more blind they are to risks and threats of disruption. This is why leaders are relying on network intelligence to inform spending decisions. A unified network allows businesses to discover and connect to trading partners of every type through a single portal, then collaborate across all of them using shared, near-real-time data and lean workflows. According to the research, 92% of leaders &mdash; versus 69% of others &mdash; use a network to collaborate with suppliers, which includes benefits such as the ability to discover new trading partners, and to use data from every transaction and contact point to make each decision and interaction more informed.</p> <p>Without a <a href="https://reg.sapevents.sap.com/flow/sap/sapphirenow2021/portal/page/sessions/session/1616721499400001uMxl" target="_blank">unified business network</a> for all trading partner collaboration, global supply chains are at a disadvantage with isolated, siloed attempts to connect a hodgepodge of suppliers, producers, distributors and service providers. By harnessing the reach and power of connected networks, organizations will be able to learn from the past, better predict the future and drive desired business outcomes together with a global community of partners.</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/supplier-relationship-management-srm" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Supplier Relationship Management (SRM)</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/sap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">SAP</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/oxford-economics" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Oxford Economics</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="The Future of Supplier Collaboration - Future of Sourcing" addthis:url="https://futureofsourcing.com/the-future-of-supplier-collaboration"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Fri, 13 Aug 2021 02:00:00 +0000 John Wookey 1995 at https://futureofsourcing.com https://futureofsourcing.com/the-future-of-supplier-collaboration#comments Rethinking the Supply Chain Takes a Team Effort https://futureofsourcing.com/rethinking-the-supply-chain-takes-a-team-effort <div class="field field-name-field-image field-type-image field-label-hidden"><div class="field-items"><div class="field-item even" rel="og:image rdfs:seeAlso" resource="https://futureofsourcing.com/sites/default/files/articles/Rethinking%20the%20Supply%20Chain%20Takes%20a%20Team%20Effort.png"><a href="https://futureofsourcing.com/sites/default/files/articles/Rethinking%20the%20Supply%20Chain%20Takes%20a%20Team%20Effort.png" title="Rethinking the Supply Chain Takes a Team Effort" class="colorbox" rel="gallery-node-1985-lJAMPcADVdQ"><img typeof="foaf:Image" src="https://futureofsourcing.com/sites/default/files/styles/juicebox_medium/public/articles/Rethinking%20the%20Supply%20Chain%20Takes%20a%20Team%20Effort.png?itok=HnHoNAkR" width="624" height="325" alt="Rethinking the Supply Chain Takes a Team Effort" title="" /></a></div></div></div><div class="field field-name-field-intro field-type-text-long field-label-hidden"><div class="field-items"><div class="field-item even"> <h1>Rethinking the Supply Chain Takes a Team Effort</h1> </div></div></div><div class="field field-name-field-related-news field-type-entityreference field-label-above"><div class="field-label">Related news:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/digital-solutions-take-wing-lifting-procurement-to-the-cloud">Digital Solutions Take Wing, Lifting Procurement to the Cloud</a></div></div></div><div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even" property="content:encoded"> <p>The supply chain is an often overlooked, yet critical, component of businesses everywhere. For a long time, the focus around supply chains has always been on efficiency and cost reduction. But when COVID-19 hit, weaknesses within the supply chain became readily apparent as traditional management approaches and technologies left businesses underequipped to tackle the huge surges in demand. This problem quickly became widespread. Whether it was a shortage of toilet paper on the consumer side or dropping supplies of microchips in the B2B world, no one was left unaffected.</p> <p>Now, over a year later, one thing is clear: Successfully surviving the unexpected requires a full team effort. Supply chains have many different elements with their own unique needs and workflows. Throughout much of the last year, the full power of partner ecosystems and tailored solutions emerged as a vital tool for businesses looking to shore up their supply chains and rebuild how they operate in order to better support and connect with customers.</p> <h2>Partnerships are Key to Protecting the Supply Chain</h2> <p>Last year&rsquo;s shutdowns caused many organizations to struggle with scaling their production or pivoting to producing critical equipment, like PPE. Turning to a trusted network of enterprise software and technology partners provides the much-needed agility that makes these kinds of pivots possible in the first place.</p> <p>Beyond this, leveraging partner solutions is highly cost-effective, freeing up more resources to be redistributed along other areas of an organization&rsquo;s broader supply chain needs. I&rsquo;ve previously <a href="https://customerthink.com/dont-go-it-alone-how-a-strong-partner-ecosystem-can-help-businesses-effectively-navigate-crisis/" target="_blank">written about</a> why partner networks are so important when it comes to meeting the unique needs of a given organization&rsquo;s customers. Many of these lessons also ring true when it comes to re-architecting the supply chain and the rapid shift toward a digital-first business model.</p> <p>Supply chains are inherently complex operations that often span the entire globe. If a problem arises in a part of the supply chain not geographically near a business&rsquo;s base of operations, the result could be costly downtime as the teams in those locations may not be equipped with the right solutions. Having access to a global array of partners makes it significantly easier to address problems from anywhere with confidence and avoid any delays in deliveries or production.&nbsp;</p> <h2>Bringing Customizability to the Forefront</h2> <p>Digging deeper, the benefit of strong partner relationships is the ability to leverage customized solutions that fit with the needs of a company&rsquo;s supply chain. <a href="https://store.sap.com/en/news-blogs/blogs/how-covid-19-galvanized-sap-partners-in-2020" target="_blank">Looking back</a> on the last year for SAP specifically, I&rsquo;ve seen the accomplishments and power of these partnerships first-hand, particularly when it comes to supply chain challenges and weaknesses.</p> <p>For instance, over the last year SAP worked with partner, <a href="https://store.sap.com/en/search/zilliant" target="_blank">Zilliant</a>, to give wholesale distributors a unique software solution and tools to manage and monitor inventory, optimizing distribution up and down the supply chain. In particular, the software provides tools to optimize pricing, provide sales guidance, and boost customer experience. All of which generate meaningful ROI for companies.</p> <p>At a time where budgets are still under strict scrutiny across industries, tailored solutions like these not only help address specific problems, but also help eliminate wasteful spending and optimize sales on the other end.</p> <h2>Bringing the Supply Chain Up to Speed</h2> <p>Supply chains have been tested more than ever before throughout much of the last year. Limitations were exposed and the need for immediate improvement became clear. Partnerships across the globe stood out, proving to be the most effective means of quickly stepping up to the challenges of the moment. Not only did we see partnerships keep things afloat, but they actually helped customers thrive even as we faced a persistent crisis.</p> <p>Global partner ecosystems are continuing to supply businesses with a trusted way to address emergencies in real-time, regardless of location. And the solutions they bring to the table offer a tailored approach that can reduce costs and optimize performance from the top down, further advancing the tech industry to meet today&rsquo;s challenges no matter the size.&nbsp;&nbsp;</p> </div></div></div><div class="field field-name-field-tags field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Tags:&nbsp;</div><div class="field-items"><div class="field-item even" rel="dc:subject"><a href="/tags/sap" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">SAP</a></div><div class="field-item odd" rel="dc:subject"><a href="/tags/covid-19" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">COVID-19</a></div><div class="field-item even" rel="dc:subject"><a href="/tags/coronavirus" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">coronavirus</a></div></div></div><div class="field field-name-field-addthis field-type-addthis field-label-hidden"><div class="field-items"><div class="field-item even"><div class="addthis_toolbox addthis_default_style " addthis:title="Rethinking the Supply Chain Takes a Team Effort - Future of Sourcing" addthis:url="https://futureofsourcing.com/rethinking-the-supply-chain-takes-a-team-effort"><a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_linkedin"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_facebook"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_twitter"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_googleplus"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_pinterest_share"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_reddit"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_email"></a> <a href="https://www.addthis.com/bookmark.php?v=300" class="addthis_button_print"></a> </div> </div></div></div><div class="field field-name-field-region field-type-taxonomy-term-reference field-label-inline clearfix"><div class="field-label">Region:&nbsp;</div><div class="field-items"><div class="field-item even"><a href="/regions/global" typeof="skos:Concept" property="rdfs:label skos:prefLabel" datatype="">Global</a></div></div></div> Mon, 17 May 2021 02:00:00 +0000 Anne Yi 1985 at https://futureofsourcing.com https://futureofsourcing.com/rethinking-the-supply-chain-takes-a-team-effort#comments