How to Respond to COVID-19 Disruptions With SAP’s AI-driven Digital Supply Chain

• Fine-tune demand forecasts. Usually, disruptive events require redefinition and reconfiguring of the supply chain network to identify the correct allocation of capacities and inventory. Probability forecasting and machine learning engines crunch multiple demand variables to automatically generate a reliable demand forecast in an uncertain, volatile environment. Traditional statistical forecasting will not be able to provide forecasting because stat forecasting relies heavily on history. Machine learning-driven Causal Factor Analysis can be useful in predicting the impacts of COVID-19 and gradual opening up after the shutdown. The models can be automated with a variety of parameters w/o having specific knowledge about influencing factors. Smart machine learning models can be used to identify the right influencing factors w/o much of planner’s or statistical modeler inputs. Scenario planning is required more than ever to identify and model the best and worst cases. Organizations can model alternative flows and networks while guaranteeing service policies to customers. IBP for demand or IBP S&OP can be used with an ability to plan simulate multiple scenarios, analyze the impacts of best and worst scenarios to Supply chain and eventually help predict company’s financials impacts.
• Dynamic multi-echelon inventory tools. Being able to understand if the supply expected from Europe needs to be re-routed and sourced from Asia or South America is important when entire channels become unavailable. Having a system that can rebalance the inventory, shift the order calendars, restrictions, and timings will help keep important goods available where needed. Inventory optimizations tools can not only allow organizations to model the shutdown and restriction scenarios but also help to understand the working capital needs to maintain certain service levels for segmented or all products and services. IBP Inventory Optimization(IO) can handle multi-echelon inventory across the network and can model inventory levels based on target service levels at different levels. IBP inventory can provide a clear understanding of working capital needs based on customer target service levels.
• Exception management: EM is more critical than ever. The entire supply chain may seem like one big exception now. However, prioritizing and removing as much human emotion as possible is extremely important. An exception-driven system that prioritizes focus is what will help companies ahead of the costly reactive processes most are facing now. IBP control tower can help in managing exceptions. Further implementation of the Supply analytics cloud (SAC) with real-time dashboarding capabilities can help identify exceptions and take actions ahead within as well as outside of the organization’s supply chain.
• Optimized "fair share allocation": Under shortage conditions, an organization can only meet 60% of demand, for example, it’s critical to use optimization and automation to determine the best way to allocate those resources until supply can be replenished. A good example here is sanitizing products. Using IBP response and supply, organizations can allocate based on the relative volume of customer business, or even based on past performance in different markets. IBP Response and Supply will support these capabilities based on Fair share factors that are defined as per the organization’s requirements.

Being ready for managing disruptions means one can automatically and quickly translate any hypothetical future scenario into a series of timely and appropriate decisions. Many of our customers are taking advantage of “be ready for disruption” SAP technology to adjust faster and better to whatever they expect to be the future market behavior brought on by this health emergency.

For example, One US-based Birlasoft customer sources raw material from suppliers who are affected by the Covid-19 crisis. The customer is facing huge demand spikes due the stay at home orders, and also facing severe shortages in supply ex. meat supply. During this time of constrained supply, the client is working with these suppliers to understand what supply will look like, balance current inventory position within the manufacturer and the distribution network, and model a range of scenarios potential downturn/upturn in demand. The COVID-19 crisis has ushered in the unknown magnitude of downturn/upturn we knew was somewhere on the horizon. Will your company merely survive it, or will you keep your foot on the gas and surpass expectations? ”