supply chain resilience business industry sap solution
Boosting Supply Chain Resilience in the High-Tech Industry – An ounce ofprevention is worth a pound of cure.Co-authors: Jeff Howell (Global Vice President of the High-Tech IndustryBusiness Unit) & Manfred Kopisch (Director, Solution Management, High TechIndustry Business Unit)Benjamin Franklin wrote in 1735 “an ounce of prevention is worth a pound ofcure” when advising Philadelphia about protecting towns from fires. Nearly 300years later, these words still apply to any area where abrupt disruptions canhave disastrous effects on a system.Covid-19 is the latest in the string of major supply chain disruptions thehigh-tech industry experienced in the last decade. External macro eventsincluding, for example, tariff wars or natural disasters are a recurringelement of risk that will continue to happen. In the example of COVID-19, itexposed the vulnerability of many organizations’ supply chains and raised thetopic of supply chain resilience to the boardroom. The consequences of supplychain disruption range from increased personnel costs, severe productivitylosses to poor customer experiences. To minimize those risks, companies mustunderstand their supply chains vulnerabilities as well as appropriatemitigation strategies available.In August 2020, SAP’s High-Tech Industry Business Unit led by Jeff Howellstarted to pool the strengths of industry experts across multiple domains,customers, partners and various SAP solution experts. Supported by SAPAppHaus, part of SAP’s Customer Innovation organization, they developed aninnovative new vision: a dashboard that provides a supply chain resiliencescore based on five different risk factors. Additionally, the solutionsuggests risk avoidance strategies, which are tested by simulations andultimately increase the company’s supply chain resilience.## Following a human-centered approachFollowing SAP’s Human-Centered Approach to Innovation, the initial challengewas to design a tool for making supply chains more resilient while at the sametime easy for the end user to consume and react to the information. To turnthe vision into reality, Jeff brought together various experts from differentLines of Business (LoB’s) who ran through different design thinking workshops,creating personas, conducting end user research with customers and partnersand extracting supply chain management challenges. The outcome was aconceptual prototype of a supply chain resilience dashboard. Like a creditscore, this dashboard provides a single score that expresses resilience basedon five risk factors: * Component Risk: Identifies critical and highest at-risk components * Disruption: Assesses suppliers’ potential for disruption based on location, regulatory, geopolitical or other issues * Workforce: Assesses suppliers’ current workforce capacity and ability to expand * Agility: Rates sppliers’ ability to serve based on capabilities: find alternate sources, alternate capacityVisibility: Rates suppliers’ capabilities to provide visibility to customers and secure visibility of their suppliers.The prototype leverages frontier technologies provided by SAP BusinessTechnology Platform and data provided by SAP Ariba, SAP Integrated BusinessPlanning for Supply Chain, SAP Supply Chain Collaboration for High Tech andQualtrics. The dashboard provides maximum transparency on supply chainresilience and allows detailed insights into every factor to make informeddecisions. By simulating recommended actions within the system, the end-usercan evaluate a quantitative-based assessment of the cost-benefit tradeoffs.## A day in the life of a supply chain executive leveraging the solution## Resilience in the supply chain planning processThe developed prototype envisions companies incorporate resilience into theirsupply chain planning process. They anticipate supply chain risks, respondusing machine-based recommendations, minimize disruptions, maintain businesscontinuity and ultimately increase customer service, market share andfinancial performance.This visionary prototype was made possible by the commitment of the cross-LoBand industry experts, customers and partners. The SAP Customer InnovationAppHaus team led the effort with critical thinking and facilitation skills,creativity, speed and determination.If you would like to join us on the innovation journey and, as a customer,collaboratively develop the Proof of Concept further, please leave a commentand we will get in touch with you. Tell us what you think and share yourcomments below.