Supply Chain Management is a complex and dynamic process for any company. Multiple variables need to be considered across numerous data points, and the uncertainty of markets can put entire SCM strategies in jeopardy. Supply chain managers rely on predictive analytics to transform their supply chains to mitigate the risk associated with this fragile facet of the business. SAP Analytics Cloud is one of the most trusted software at the forefront of this application.
Predictive Analytics and SCM
As the name suggests, predictive analytics deals with the prediction of future trends. This can be potential demand, supply chain metrics, or market fluctuations. This branch of analytics utilizes statistical methods like regression and extrapolation. The information provided by predictive analytics is vital for any business to make plans and mitigate any situation that might be a risk to the company. It also empowers a business to explore new opportunities to expand and optimize its supply chain for greater business value.
With the help of cloud BI platforms like SAP Analytics Cloud, which leverage AI and machine learning, predictive analytics has become more accurate, allowing businesses to make decisions, safeguard against risks and minimize losses quickly.
What does SAP Analytics Cloud do for SCM?
SAP Analytics Cloud provides the needed level of transparency and insight to overcome the gaps and weaknesses in a company’s SCM through predictive analytics. Here are the areas where SAP can impact a positive change in SCM.
Demand Forecasting and Pricing Strategies
Demand and pricing are dynamic aspects that need to be based on market conditions. Demand forecasting makes it possible to dynamically adjust the production, supply, and price, predicting what the market will accept. SAP leverages machine learning with the help of sophisticated algorithms that identify correlations, trends, and anomalies in data to enable decision making for optimal supply and pricing.
Inventory Optimization
A business needs to maintain an optimal level of inventory that aligns with demand and pricing strategies. Predictive analytics is critical in determining ideal stock levels across various distributions centers. This is a delicate balance to maintain the right on-hand stock to minimize excess inventory while at the same time avoiding shortages. AI/ML in SAP Analytics Cloud helps your organization become agile and quickly assess risks and explore opportunities so that you can be prepared.
Logistics
Transport is an integral part of SCM. Costs associated with the movement of goods account for a significant proportion of product pricing. Predictive analytics enables you to know the frequency and quantity of transport to minimize logistical costs. More importantly, BI tools like SAP make it possible to simultaneously analyze traffic, distance, weather, vehicle information and deliver points to provide faster routes, optimized fuel consumption, and resource utilization.
Mitigating Risk
Surprises in business introduce risk. Companies can face disruptions like unfavorable weather conditions, labor issues, traffic congestion, and more. Unpreparedness can increase risk and losses. Predictive Analytics with SAP enables you to proactively respond to these situations and safeguard your supply chains against sudden changes in the status quo.
Predictive Maintenance
Breakdown of machines or vehicles results in unwanted downtime that can adversely affect production and supply for a business. It is essential to anticipate these incidents and conduct predictive maintenance before the machine breaks down to reduce this risk. With IoT, SAP Analytics provides cloud-native solutions that set up your business for victory with Industry 4.0. This delivers benefits like lower maintenance costs, improved asset availability, lower risk to personnel, and reduced downtime.
Image Source: https://www.forbes.com/sites/louiscolumbus/2015/07/13/ten-ways-big-data-is-revolutionizing-supply-chain-management/?sh=74c80dca69f5
SCM Success with SAP Analytics Cloud
The fact that there are vulnerabilities in the supply chain is evident to every business. SAP Analytics Cloud makes it possible to provide transparency and insight to deal with these gaps and grow your business. Companies can benefit from predictive analytics by identifying trends, automation, and actionable insights that help improve SCM decision-making. In addition, artificial intelligence and machine learning further empower supply chains to realize tangible benefits.
ComTek has worked with companies of various sizes and across industries to implement SAP Analytics Cloud for predictive analytics. Our core competence with SAP technologies makes us the right partner for your Supply Chain Transformation.