Creating a Network of Networks

Due to the Coronavirus, the global economy is facing the most disruptive challenge of the past 75 years. Across all industries, even the most forward-thinking companies have reported disrupted supply chains and effects on many day-to-day business operations due to the uncertain supply of critical materials, demand volatility for goods and services, and constrained capacity in manufacturing and logistics.

In most business processes today, there are many dependencies. Companies are using and, in many cases, depending on their network of partners to meet growing customer demands for innovative and sustainable products, delivered when, where, and how they want them. A disruption in only one of the steps can put the whole process at risk.

No doubt, COVID-19 has highlighted supply chain sensitivities and the need for responsive, resilient, interconnected, and circular supply chains. But the outbreak isn’t an isolated event. Disruptions are increasing in frequency and magnitude, including geopolitical events, climate-related disasters and public health crises.

Traditionally, companies served their customers with a siloed value chain and manage relations in a sequential manner and point to point – and many still do. For decades, low-cost supply and minimal inventory were the key tenets of supply chain management. But in an increasingly turbulent world, supply networks that are overly dependent on the lowest-cost supplier and minimal inventory levels without safeguarding human rights and labor standards can rapidly imperil the business.

Transparency, choice, and agility

Complex business networks already exist as companies rely heavily on their extended ecosystem to operate effectively. They need to understand their multi-tiered supply network. They need to collaborate with manufacturing partners, asset service providers and third-party logistics providers. They also need to serve their customers through distributors, resellers, wholesalers, or retailers in a demand network.

But often they are hindered by linear, siloed systems with point-to-point integrations that limit the flow of information and processes. To adjust quickly and responsibly to disruption and fast-changing market demands and manage dependencies in real-time, companies need to reinvent how they do business with the help of interconnected value chains and flexible networks.

A unified business network is greater than the sum of the individual businesses. It incorporates customers, suppliers, distributors, and other stakeholders – cross company, and across company borders. By sharing data and information in the network, enterprises get real-time 360 visibility to sense demand, anticipate risks, and manage retail, distribution, and procurement through to the consumer.

Building on the largest business network in the world, SAP is uniquely positioned to expand beyond the business processes within the ‘four walls’ of a company and digitize cross-company business processes across supply chain ecosystems. We will bring together customers, suppliers, manufacturers, distributors, service providers, and other stakeholders in one network, creating win-win situations for all participants. For example, customers can choose manufacturers that meet their production standards or are closest to them to reduce emissions. Manufacturers can pick the suppliers that are able to deliver components when they need them. Suppliers can work with distributors that comply with their labor standards. And thanks to real-time visibility, all with a plan B, C or D in case of sudden changes.

We will replace disconnected, one-to-one integrations with trading partners, bringing points of integration together in one place. The SAP Business Network connects our existing procurement, logistics, asset, and industry-specific networks today, and will connect to more networks in the future.

Because when all your networks become one single network, collaboration becomes singular and synchronous – and a common data model, set of services, intelligence and an analytics engine make it possible. Now you and every trading partner connect to the network once, in turn connecting you to multiple partners and people. Your systems connect once, and processes and data flow freely and securely across functions and workflows.  

With this level of consistency and precision, the SAP Business Network smooths out the friction that slows down commerce. It applies cross-company, network-wide intelligence to predict opportunities and avoid disruptions. It delivers deeper insights to benchmark your performance, so you know where you can improve. We will share more information soon, so stay tuned!

Moving from enterprise to network planning results in enhanced transparency, visibility, collaboration, agility, and optimization, and allows for better steering across the whole value chain in real time. We will create value for our customers by giving them visibility and insights into their supply network, offering flexibility in adjusting it rapidly, and a way to collaborate along end-to-end processes that span way beyond company borders.