The fol­low­ing guest per­spec­tive was authored by Michael O’Donnell, Chief Rev­enue Offi­cer, Dig­i­tal Sup­ply Chain, SAP North America.

Sup­ply chains have changed. 

For decades, busi­ness lead­ers viewed them strict­ly from a cost con­trol per­spec­tive — as some­thing to be restrict­ed and restrained as much as pos­si­ble, so that busi­ness­es could max­i­mize mar­gins. This meant low-cost sup­pli­ers to dri­ve sav­ings, few­er sup­pli­ers to dri­ve vol­ume dis­counts high­er, and longer lead times to dri­ve low­er costs. 

This strat­e­gy worked ade­quate­ly for a long time, but its flaws were exposed in 2020. With no mar­gin for error, there was no way to keep up, dur­ing or after the pan­dem­ic, as our entire under­stand­ing of the sup­ply chain was turned on its head and dis­rup­tion became the norm. For years now, busi­ness­es have been try­ing to rebuild sup­ply chains in response.

How­ev­er, even today, only 12 per­cent of com­pa­nies are suf­fi­cient­ly pre­pared for future glob­al val­ue chain dis­rup­tions. Just as con­cern­ing­ly, more than half of sup­ply chain exec­u­tives are not involved in craft­ing com­pa­ny strategy. 

So, how can you ensure your busi­ness deci­sions are ful­ly inte­grat­ed in 2024 — and that they ful­ly incor­po­rate the sup­ply chain from end to end? Start with these three strate­gies to ensure you are pre­pared to embrace the lat­est tech­no­log­i­cal shifts and inno­va­tions. Togeth­er, they’ll help you con­nect your entire process, from design to plan­ning to man­u­fac­tur­ing, deliv­ery, and con­tin­u­ous operation. 

1. Use Change Man­age­ment to Build Resilience

Today’s enter­pris­es must place one trait above all oth­ers when it comes to sup­ply chains: resilien­cy. With­out this, you have nothing. 

The most impor­tant ele­ment of build­ing a resilient sup­ply chain is a com­pre­hen­sive change man­age­ment approach. Sim­ply put, enact­ing a resilient sup­ply chain is about far more than just imple­ment­ing the right soft­ware or solu­tion. It’s about cre­at­ing ful­ly inte­grat­ed prac­tices and process­es that trans­form com­plex busi­ness­es from the bot­tom up. This means diver­si­fy­ing sup­pli­ers, cre­at­ing con­tin­gency plans, and invest­ing in risk man­age­ment strate­gies to address unfore­seen disruptions. 

More broad­ly, this means break­ing down the siloes com­pli­cat­ing your oper­a­tions; the sup­ply chain must be one piece of your end-to-end busi­ness process. From a bird’s‑eye view, con­sid­er how sup­ply chain and relat­ed tech­nol­o­gy fits into the enterprise’s over­all IT roadmap. What about one, five, 10, even 20 years from now? How are you — and how can you — exe­cute around that larg­er strategy?

The com­pa­nies that most deeply under­stand the tech­no­log­i­cal levers they’re pulling, along with the impact those levers will have, should see the great­est suc­cess when it comes to the sup­ply chain. Your tech­nol­o­gy land­scape, the data that feeds into it, and how that all works togeth­er is essen­tial to your future. 

2. Focus on Sup­ply Chain Sustainability 

Where the sup­ply chain is con­cerned, doing the right thing is also prof­itable. A more resilient, effi­cient, ful­ly inte­grat­ed sup­ply chain can help with eth­i­cal sourc­ing, car­bon foot­print, and envi­ron­men­tal­ly friend­ly busi­ness prac­tices that meet con­sumer and reg­u­la­to­ry expec­ta­tions. This won’t just dri­ve a more stream­lined oper­a­tion for your enter­prise and improve your bot­tom line; cus­tomers are, in fact, more like­ly to choose the sus­tain­able com­pa­ny when giv­en a choice. 

How can you make this hap­pen? It starts with embrac­ing advanced ana­lyt­i­cal tools that help you gath­er, ana­lyze, and act on data in a pow­er­ful, deci­sive, enter­prise-wide fash­ion. Too often, today’s actions are reac­tive and based on anec­do­tal, infre­quent, or out­dat­ed data. Cre­at­ing a sus­tain­abil­i­ty port­fo­lio with fac­tu­al, objec­tive, up-to-date data will help you dri­ve green results — both envi­ron­men­tal­ly and mon­e­tar­i­ly. A once-a-year sus­tain­abil­i­ty report just isn’t going to cut it any­more; if you want to reach car­bon neu­tral­i­ty, a sus­tain­able sup­ply chain strat­e­gy is essential. 

As you con­tin­ue embrac­ing addi­tion­al sus­tain­abil­i­ty ini­tia­tives in your port­fo­lio, the impor­tance of know­ing the cost asso­ci­at­ed with imple­ment­ing each one will rise. This will help you ful­ly under­stand the change you’re mak­ing, the relat­ed mea­sur­able ben­e­fits, and the over­all return on invest­ment. So, whether you’re shift­ing toward wind, solar, hydro, or some oth­er form of green ener­gy, your tech­nol­o­gy will help inform your strat­e­gy and deci­sion making. 

3. Embrace AI as a Trans­for­ma­tion Tool

In my role at SAP, I get to see first-hand a num­ber of promi­nent enter­pris­es uti­liz­ing arti­fi­cial intel­li­gence (AI) in inno­v­a­tive ways to bet­ter sup­port sup­ply chain-relat­ed ini­tia­tives. For smart busi­ness­es, AI is not about replac­ing humans; it’s about enabling them to focus more deeply on crit­i­cal analy­sis, speed­ing up scale and elim­i­nat­ing slow, repet­i­tive tasks. The oppor­tu­ni­ties are endless. 

Take Blue Dia­mond Grow­ers, an agribusi­ness focused on almonds and almond prod­ucts, which used AI to auto­mate its man­u­al process­es and accel­er­ate plan­ning, elim­i­nate bot­tle­necks and short­ages, and cut response times in plan­ning and cus­tomer sup­port func­tions. The com­pa­ny was able to improve deliv­ery assur­ance, reduce short­ages and enable quick­er response to dis­rup­tion—in the process sav­ing over $1 mil­lion in annu­al trans­porta­tion-relat­ed sup­ply chain costs.

Or look at Pat­ter­son Den­tal, a whole­sale dis­trib­u­tor for den­tal health prod­ucts and equip­ment that embraced AI-enabled field ser­vice man­age­ment soft­ware to improve route plan­ning for field tech­ni­cians and to bet­ter coor­di­nate cus­tomer appoint­ments for repairs. Stream­lin­ing its process­es and improv­ing sup­port for its dis­patch­ers made a mas­sive dif­fer­ence in the over­all opti­miza­tion of work and rev­enue. In the end, Pat­ter­son Den­tal reduced its car­bon emis­sions by 40 met­ric tons per year due to bet­ter rout­ing and reduced fuel use. 

All these strate­gies are meant to work in uni­son, from end to end. The objec­tive is to build a busi­ness and IT land­scape that func­tions effec­tive­ly, from the design stage all the way to the oper­a­tion stage. That’s what we’re focus­ing our ener­gy on in the SAP ecosys­tem: Think­ing broad­ly and strate­gi­cal­ly to cre­ate mean­ing­ful busi­ness out­comes for our cus­tomers. There’s a lot of risk when things are dis­joint­ed; alter your think­ing today so you can bring it all togeth­er for a more suc­cess­ful and resilient future.

Michael O’Donnell is Chief Rev­enue Offi­cer, Dig­i­tal Sup­ply Chain, SAP North America.