SAP ARIBA
network tick through collaboration ,” Schenecker says . “ People are understanding this more and more . It ’ s about responding quicker , and more cost effectively and how we can create this near real-time instantaneous communication with our suppliers and treat them as an integral part of our supply chain and network .”
SAP Ariba works with companies in creating solutions in order to establish and build this “ tight knit ” collaborative network . Millions of companies all over the world use SAP ’ s cloudbased network to manage their business relationships and allow their customers to shop , share and save .
This network is what enables that true collaborative approach . It allows buyers and suppliers to collaborate on transactions , manage their entire procurement process from source to settle , all the while controlling costs , finding new sources of savings and building an ethical supply chain .
One of the key advantages in this collaboration is reducing lead times . A typical plant , when processing an order , could have a month of supply of parts . These parts are either stored by a supplier , sometimes via a 3PL , or stored on the factory floor or warehouse . This is often inconsistent and will vary from product to product , part to part .
“ If we run this through our tight knit collaboration you are looking at significantly reducing inventory ,” says Schenecker . “ Taking days or weeks of supply of inventory out of the supply chain will reduce costs . These inventory cost savings are critical to reducing the cost of the finished goods . It ’ s a real big move on the profit line .”
Supply chain and procurement processes are often complex , taking into account direct spend ( the materials that go into the makeup of a product ), as well as indirect spend ( services such as facilities management ) which , when multiplied across numerous manufacturing lines , represents a significant investment .
Schenecker points to the need for change management and how one of the biggest moves in product design is the intimate integration of procurement . Engineers or designers are sometimes in a position where they
152 May 2018