What is the biggest pain point for a supply chain today? Simply put, it’s meeting customer demand, efficiently. Every supply chain, large or small, would benefit from better understanding its planning and execution management from design, to manufacturing, to delivery, to operation.
A digital twin can provide the visibility a supply chain needs to understand how its own processes work, or don’t work, and then how to improve them. Improved processes lead to better products or services, and with those come happier customers.
That’s what Hala Zeine, then president of SAP’s Digital Supply Chain discussed during her keynote at ASUG’s Experience for Supply Chain and Procurement in 2018.
“We cannot solve problems for modern people without modern tools” she said. “And a great customer experience relies on a great product experience. To do this, you need to be able to provide customer centricity in every single part of the supply chain, you need to have visibility, and you need to have business innovation.”
Bringing Intelligence to Your Supply Chain
How do you keep the customer at the center of your business planning? Intelligently, of course. “Intelligent technologies,” Zeine said, “can help supply chains make better sense of data, plan and predict outcomes, and optimize the entire product life cycle including the customer experience.”
She cautioned, however, that it’s not just about adopting new technologies. A supply chain must also rethink how the processes behind them work. “An intelligent enterprise connects these tools together within a supply chain to better design, manufacture, deliver, and manage products.”
Connecting the Links
So, what is an intelligent enterprise? According to Zeine, it brings together all the lines of business to work together in an integrated manner, with processes infused with intelligence and connectivity, all on one digital platform powered by SAP HANA on the cloud.
“It’s being able to identify an emerging problem using connectivity, identifying what is needed to resolve that problem, and then addressing it before the problem occurs,” she said. “That’s the world I want to live in.”
Providing a Clear Line of Sight
Zeine asked, “How do we push the supply chain into the future and prepare the companies to do it?” Give them visibility by creating a digital twin of their end-to-end supply chain.
What good is adopting the latest technologies—the Internet of Things (IoT), machine learning, artificial intelligence, analytics, big data, blockchain, 3D printing, and robotics—if you can’t see how your processes are working or not working? Managing your supply chain requires your ability to manage logistics challenges along with customer requirements.
A digital twin is a virtual replica of your physical assets, systems, or processes. Backed by real-time data using intelligent technologies, a digital twin equips you to make more-informed decisions and adapt to changing conditions faster as you observe the conditions in your parallel simulation.
“The future of the supply chain,” Zeine said, “is somewhere where the digital world and the physical world are entangled. It’s where you can simulate in one and execute in another.” Visibility helps reduce inventory and improve lead times, helping to meet customer expectations as well as business objectives.
Kinks in the Chain
Although there are supply chains that have already adopted an intelligent approach and are using a digital twin to streamline and improve business processes, not everyone is on board with this idea yet.
“Supply chains have always been a place where most innovation takes place,” Zeine noted. “I believe every supply chain professional aspires to living in a digital reality. The will is there, and the technology is really coming to maturity to be adopted at mass scale. The trick is to get it done. I believe a lot of companies are on that journey already. I think anyone who thinks it’s too far off may lose out.”
What’s the Next Link?
What’s next is already being discussed. “We’re moving toward a hybrid world,” Zeine said. “It’s digital and nondigital.” Consumers want to be able to interact with a company, and be recognized as the same customer, whether digitally or in person.
“The omnichannel experience,” Zeine added, “will no longer be just about a front-end experience. It’s also a supply chain experience because every store will need to become a warehouse.” For example, a customer may first explore a product or service online, but then want to try or see it at a physical store before purchasing it. The app the customer uses online should be capable of identifying the nearest physical store that carries that product, and then also reserve it for the customer so that it isn’t sold to someone else. “That movement between supply chain and customer experience would be delightful,” Zeine said.
The Big-Picture View
Even beyond customer experience, the benefits of a digital supply chain can extend to worker safety. “We have cameras inside trucks to measure driver behavior,” Zeine said. “But what if we use sensors and cameras to measure fatigue or exposure to noise and other things,” she asked. With that kind of information, a supply chain can better plan for worker safety and productivity.
Something else that Zeine is very passionate about is the environment. “The environmental impact and the business impact are finally moving in the same trajectory,” she said. “No one wants to overproduce. But with technology, we can produce the same or more with less. And if we still have waste, we can connect companies in a whole new way and truly create a circular economy where we use each other’s waste and upcycle it for another purpose. That can only be possible, of course, if each company connects digitally with others.”
Zeine believes there are great things ahead, and a new digital reality is on the horizon for the supply chain industry. Easier for supply chains and delightful for consumers sounds like something to look forward to.
If you’re looking to learn how your peers are doing more with enterprise asset and supply chain management, you should join us at the SAP-Centric EAM & Supply Chain conference, March 16–18 in San Antonio, Texas. Early-bird registration is available through Feb. 7, and ASUG members receive $200 off registration. You can also register for our webcast, “The State of the Supply Chain for SAP Customers.”