African companies are increasingly looking to digitise their supply chains by implementing a cloud-based digital platform that optimises traditional enterprise resource planning (ERP) processes while integrating new technologies.
Enterprise resource planning (ERP) is a process by which a company, often a manufacturer, manages and incorporates the important parts of its business.
According to Mehmood Khan, Chief Operating Officer (COO) at enterprise application software company, SAP Africa, COOs and supply chain management are feeling the brunt of an accelerating business environment further complicated by increasing customer demands for efficiency, personalisation, and convenience.
“Slow manual processes based on inconsistent information across functional areas spell death for modern supply chain management, with an inability to adapt in real time to changing demands leading to subpar customer service and potential attrition,” he said in a statement issued this week.
Khan argues that cloud-based platforms that enable real-time decision making based on accurate big data – generated through traditional processes as well as the growing prevalence of sensors – and predictive analytics powered by machine learning is changing the way companies approach to supply chain management.
Accenture, a global management consulting and professional services company, predicts that the software as a service (SaaS) market for supply chain management market will reach $4.4-billion in 2018, driven by a need to simplify and optimise today’s complex global supply chain networks.
Studies by another consultancy known as the Boston Consulting Group found that leaders in digital supply chain management enjoy increases in product availability of up to 10%. They also report more than 25% faster response times to changes in market demand, and up to 110% higher operating margins.
Khan states that by automating supply chain procurement processes through best practice machine learning, COOs and supply chain managers can eliminate opportunities for error and ensure effective event and risk management based on expert systems.
“However, the job of the COO and his supply chain management support to lead the organisation into this exponential future is complicated by the need to manage the implications of digital transformation while simultaneously innovating the underlying business model,” Khan explains.
Digitising the supply chain enables companies to integrate, embed intelligence, and visualise all supply chain processes from supplier to customer.
This, says Khan, opens the door to live inventory management through a redesigned data model that finally provides true transparency on inventory flows. Placing a digital core at the centre of all supply chain management processes further enables planning to identify opportunities for meeting potential market demand with high levels of service at low cost.
“Manufacturing costs are also reduced as detailed constrained planning and scheduling enables agility within the supply chain and optimises the efficient use of capacity,” Khan adds.
Khan argues that with exponential technologies such as the internet of things (IoT), big data, predictive analytics and machine learning integrated into systems such as SAP’s S/4HANA digital platform, COOs and supply chain management can leverage rule-based allocation check in a single system to ensure the needs of strategic customers are always met.
SAP S/4HANA is a real-time enterprise resource management suite for digital businesses.
Khan explains that with such technology, the business outcomes can be transformative “reducing days of inventory by 10 to 12%, reducing revenue loss by up to 15%, cutting total logistics costs by up to 12%, and reducing supply chain planning costs by up to 5%.”