What specific challenges does a supply chain planner face in midsize businesses?
The midsize company, particularly in manufacturing, faces enormous pressure to deliver acceptable sales growth and profitability in markets that are more competitive than ever before and less tolerant of subpar performance. It is an oft-perpetuated myth that midsize businesses are somehow forced to be less capable than their larger peers. These companies are required to do more with less, but their customers invariably hold them to the same levels of capability and performance. In the past, the entry cost of business software has left many midsize (aka mid-market) companies scrambling to manage their supply chain either manually or with spreadsheets not purpose built for the task, thereby exposing the business to supply chain failures. The functions that sit within supply chain planning (demand forecasting, supply management, and sales and operations planning) are particularly problematic in the world of general purpose spreadsheets given the current level of sophistication in purpose-built planning tools.
At midsize companies, employees who have responsibility for supply chain planning (either dedicated or as part of a broader set of functions) on the demand and supply sides are typically caught between the need to generate better forecasts and develop consensus planning and the limited tools at their disposal. The need to deliver a positive and timely customer experience, with previously un-imagined levels of product and services customization, puts enormous pressure on the supply chain planner to be more efficient and more effective. In today’s inherently complex supply chain planning environment, this is hard to do competitively without a purpose-built planning engine.
What role has modern technology played in opening new opportunities?
In the early days of cloud computing, it was assumed that the most material beneficiaries would be midsize businesses that had been largely left out of the on-premises applications game due to high license and support costs. While the adoption of cloud by large enterprise companies has exceeded early expectations, the assumption that cloud would open opportunities for the midsize business has proven to be prescient. Indeed, cloud has enabled easier access to other forms of modern technology,such as advanced analytics and artificial intelligence (AI), that have been a real boon for the midsize business. This is particularly true in supply chain planning where cloud application vendors have made even their most sophisticated planning engines (e.g., advanced analytics, AI) available at costs that all comers can afford. The benefits of cloud are not just the obvious, initial elements of cost such as licenses and maintenance versus subscriptions; they also include the ability to consume upgrades and functionality enhancements seamlessly. Historically, upgrades have been an issue for companies of all sizes, but they are particularly challenging forsmaller companies where both monetary and people resources are stretched much more thinly. Supply chain planning application sets have also opened opportunities for midsize businessesto massively improve their overall planning environment,whether the ability to forecast better or to eliminate unnecessary latency across a mix of homegrown and commercial planning tools.
What are some use cases for midsize companies in supply chain planning?
In a recent IDC supply chain survey, demand and supply planning was identified as the supply chain capability most correlated to business success for midsize companies. These businesses also cited it as an important focusig their efforts to improve supply chain visibility and collaboration with suppliers and customers. In the mid-market, the need for supply chain and supply chain planning use cases is frequently tied to the industry in which the business operates and how quickly that industry is innovating. Not surprisingly,manufacturing is one of the industries where supply chain planning and overall enterprise resource planning (ERP) adoption rates among mid-market companies are the highest. It’s also one of the industries where midsize businesses are most enthusiastically embracing supply chain digitization. A key use case is accelerating the order-to-cash process. This can be a win-win for businesses and customers because it improves cash flow predictability for the business while improving the customer experience. Enterprise players are setting a standard of delivering accurate and up-to-date real-time inventory information to customers, no matter which sales channel they ultimately purchase from. Midsize companies that want to compete against larger players need to meet that standard, particularly in direct-to-consumer businesses, or those consumers may opt for speed of order fulfillment from a competitor.
What prevents midsize companies from investing in modern digital technology and supply chain planning sooner in their growth phase? Midsize companies have historically been slower adopters of technology that has frequently been beyond their financial reach, particularly when factoring in the IT resources needed to support implementation and ongoing system management. It is also commonly the case that employees within a midsize company supply chain have multiple roles and their bandwidth for application assessment is limited. In the previously cited IDC supply chain survey, 63% of midsize companies self-reported as being either at or behind the median in terms of their supply chain transformation efforts, suggesting that acceleration of these programs is a strategic imperative. The reality is that the way in which midsize companies have “made do” is no longer enough, and although the specter of disruption exists for businesses of all sizes, it’s particularly immediate for midsize companies. Indeed, the availability of “function as a service”means that barriers to entry have never been lower.Anybody with a compelling product idea can access outsourced supply chain, sales, and even marketing capabilities to support commercialization efforts. Midsize companies compete with not only traditional players but also emerging companies that are potentially leveraging much more modern supply chain facilities from external providers. Ironically, technology is largely responsible for the lowering of these barriers, so the imperative to employ technology to even the playing field is high. Fully 75% of midsize companies expect to be disrupted by either an existing competitor adopting digital supply chain technologies or a new, digitally native market entrant. In addition, the data shows that midsize businesses that are successfully digitizing are nearly twice as likely to see double-digit revenue growth as those continuing to make do with their existing processes. Yet, the data supports the contention that midsize companies are moving to adopt modern technology within the supply chain. The percentage of midsize companies either in pilot or in production with supply chain cloud applications exceeds the percentage of large enterprise by over 10 percentage points. These companies are adopting multi-enterprise supply chain networks more aggressively as well.
What have been some early benefits of cloud-based digital planning capabilities?
The need for a customer-centric approach to supply chain planning is driving both interest and investment in cloud-based planning tools with integrated AI, machine learning, and analytics. A customer-centric approach is also why midsize companies are increasingly investing in 3rd Platform technology —cloud, mobile, big data/analytics, and social. Midsize manufacturers aspire to the same capabilities as their larger competitors: open innovation, better meeting of customer needs, rapid customization and configuration, and the ability to monetize product and asset performance. Early benefits of supply planning tools have been the ability to generate a better demand forecast and then link that forecast with supply agility and flexibility. If we accept that customer service and experience delivery are the central purpose for the supply chain, then the ability to calibrate to an improved demand forecast means better performance against service metrics. Modern supply chain planning tools have also improved profitability performance through inventory optimization and network safety stock reduction, have enabled faster and better decision making with data insights and what-if scenarios, and have improved supply chain process transparency through access to real-time data and analytics reporting. Cutting-edge artificial intelligence and machine learning supply chain planning capabilities are even beginning to automate traditional and often rote planning tasks, freeing up planners to focus on more strategic activities. Given the multiple hats that midsize business supply chain planners typically wear, relieving them of even one task can be liberating. Business growth was the top supply chain priority in IDC’s most recent supply chain survey, and the ability to achieve growth is linked inexorably with better planning. If the supply chain is critical to a company’s digital transformation efforts, planning transformation is at the heart of supply chain transformation
IDC ANALYST CONNECTION Sponsored by: SAP
Questions posed by: SAP Answers by: Simon Ellis, Program Vice President, Supply Chain Strategies, and Shari Lava, Research Director, small and medium businessRead more…
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Now it is possible to have a 360 view of your business, you can even create reports and analyse all aspects of your company without the need for expensive IT consultants, anytime, anywhere and via any mobile device.Read more…
Trends are pointing towards digitalization of businesses in many ways. Digitalization is changing the way we do business, and the way we carry out our personal daily transactions. These days, it feels like there’s an app for everything. From ride-sharing apps changing your commute to your favourite non-pizza establishments delivering right to your door-step with the tap of finger.
Though it’s getting harder for more traditional establishments to compete, they’re far from becoming obsolete. Traditional brick and mortar stores, for example, can remain competitive by adapting to digitalization trends in order to enhance the customer experience. Offering options to pick up in store or have the items delivered to the customer can help businesses add convenience to their overall product offering.
Many store owners may fear digitalization. Managing it in a disintegrated way can, however, be daunting and stressful for the store owners. iStrat Commerce offers retail store owners a way to further automate the process of managing their sales. Integrating the online storefront with the backend ERP solution can help simplify the processes and effectively help them grow.
What are your thoughts on this? Contact us to share your thoughts or learn more about iStrat Commerce.Read more…
According to Tracey Heinz or RDXsports, there are 4 key challenges facing modern distributors. Globalization and technological trends allow manufacturers and retailers to rely on their own distribution networks. How are distribution companies expected to sustain profitability? We will address the challenges mentioned in this article in a condensed format. There’s no denying that companies are required to keep up with changes in the digital transformation space. Getting your company tech-savvy may seem like a huge undertaking, but the whole process of digitalization is actually much simpler than you may think. And it can help distribution companies tackle the challenges outlined below.
Inventory Management and Disintermediation
Inventory Management as a “complex problem” is a thing of the past. SAP Business One Cloud will help you manage your inventory by bin location, warehouse, etc. so you can keep the most accurate records on hand. With the mobile app, you can very conveniently access this information in real-time and on-the-go. These statements are an oversimplification of the solution. For more information, click here and contact us.
SAP Business One is so much more than a simple inventory management software though. Since it’s one solution that covers inventory, purchasing, sales, HR, finance and more business functions, it aims to reduce a company’s total cost of ownership; thereby allowing companies to invest in more innovative and strategic growth. Distribution companies can benefit from this significantly as they’d be able to offer retailers competitive prices with more value (services, etc. that they offer).
E-commerce Takeover and Demanding Customers
Times are changing. More businesses are moving online. Millenials, who grew up on technology, are changing the standards for how business is conducted. Amazon, for example, has taken out many brick and mortar establishments. Distribution companies would need a solid e-commerce solution to effectively compete in today’s marketplace. If companies are unable to adapt to the shift in the way business is done, they will struggle to differentiate themselves with their competitors. Having a customer friendly storefront is just the first step to competing with other distributors. Our solution “iStratCommerce“ will ensure you are presenting your best-self online and provide the integration with your back-end ERP to streamline the sales and inventory management processes.
This is an oversimplification of the value that can be derived from integrated software solutions like SAP Business One and iStrat Commerce. For more information, contact us or book a demo today!Read more…
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Speed and agility are vital to outmaneuvering larger competitors with greater resources. You need to understand the implications of every decision and action without losing momentum – or losing sight of your vision.
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Unlock valuable business insights
SAP Business One version for SAP HANA transforms reporting by searching your SAP Business One application data to give you the answers you need right now. Locate business data or transactional information as quickly easily as you would search the internet, then filter, sort and drill down into the results. Reports that used to take hours or days to run are compiled in minutes, if not seconds. And no matter how much data your business accumulates from any source, you can run highly complex and data-intensive analyses in real-time. Benefit from embedded analytics to gain live, incontext insights instantaneously, to inform decision-making at the moment of truth or the point of transaction, and gain deeper insight into the past, present and future of your business.
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SAP Business One version for SAP HANA includes an advanced available to promise (ATP) app that provides real-time visibility into current inventory, ordered stock, replenished stock and stock being delivered. You can immediately reserve current stock for future delivery dates and reschedule existing orders on the fly. Embed dashboards in transaction screens so front-line employees can see the data they need to make business decisions in the moment, such as customer purchasing habits or creditworthiness. Equip your sales personnel to make intuitive product recommendations from within orders and quotations based on the customer’s buying history and what similar customers were interested in.
See your cash position at a glance
For growing businesses, the quality of cash flow forecasting can make the difference between thriving or closing for good. SAP Business One version for SAP HANA includes a cash flow forecasting app that dramatically improves your cash balance visibility. In a few clicks, you can configure the calculations to track the moving parts of your cash flow: sales orders, purchase orders, down payments, recurrent postings and other critical cash-related transactions. The end result is a clear snapshot of your cash balance, taking into account thousands of documents, accounts, orders and payments, so you can ensure you have the cash you need to run your business and seize new opportunities.
Easy on the IT
SAP Business One version for SAP HANA lets you run your business on a single, affordable enterprise solution that will scale as your enterprise grows. It simplifies your IT landscape by taking advantage of in-memory computing and by delivering application, database and integration services in one platform. It will transform the efficiency of your IT team by eliminating the time-consuming data preparation, pre-aggregation and tuning tasks demanded by traditional reporting and analytics tools, while empowering business users to do more on their own. SAP Business One version for SAP HANA eliminates the layers of complexities and unnecessary business costs typical of legacy IT architecture, so your business can run simper as well as smarter. With less hardware and maintenance than traditional database solutions, you can expect lower Total Cost of Ownership, too.Read more…