How SAP is Using AI to Transform Supply Chain Solutions

SAP will help businesses find supply chain solutions with its AI advancements to make better decisions, streamline development, and improve efficiency

The global leader in enterprise applications and business AI announced advancements in its AI supply chain solutions that will unleash a transformative wave of productivity, efficiency and precision in manufacturing.

AI-driven insights from real-time data will help companies use their own data to make better decisions across supply chains, streamline product development and improve manufacturing efficiency.

The challenges businesses are facing

"Businesses today are confronted with challenges ranging from supply chain disruptions and labour shortages to geopolitical uncertainties," says Muhammad Alam, member of the Executive Board of SAP.

    "SAP recognizes the imperative for agility and intelligence, driving innovation with AI-powered solutions to streamline supply chain and manufacturing processes.

    "Companies can enhance operational efficiency and improve supply chain resiliency while delighting customers with superior service, paving the way for sustained growth and market competitiveness."

    What improvements have SAP made?

    The relevant real time information, along with its accuracy, will help to mitigate the impact that supply chain disruptions have on suppliers, manufacturers and distributors worldwide.

    SMA Solar Technology AG, as well as other users, say they have already seen benefits from using SAP’s solutions, including an approximately 15% increase in supply chain workforce productivity, a 10% decrease in overall supply chain planning costs and a 10% reduction in inventory carrying costs and stock turnover rate.

    "SMA Solar modernises its manufacturing execution systems to support sustainable, risk-resilient manufacturing operations with the power of AI-enabled visual inspection in the SAP Digital Manufacturing solution," adds Heiko Kehm, SMA Solar head of IT Order to Cash.

    Heiko Kehm, SMA Solar head of IT Order to Cash (Credit: LinkedIn)

    63% of supply chain executives and 52% of operations executives have an AI strategy linked to business objectives, according to "The Importance of AI in Supply Chain and Operations," a global 2024 IDC InfoBrief sponsored by SAP. Of the 2,000 survey respondents, 51% said they're embedding AI into supply chain planning business processes and key applications for real-time decision-making.

    Another 58% are using AI to increase operational efficiency and employee productivity.

    What key improvements does SAP offer to AI strategy?

    • Optimising decisions across the supply chain with AI-driven insights: Companies can now leverage higher volumes of machine data and integrate AI-driven visual inspection by computer into their production processes, enabling a remarkable increase in quality through automation.
    • Streamlining product development: Product developers can now use SAP's AI co-pilot Joule to gather and enhance new product ideas quickly and effectively using natural language queries. Joule also helps tag product designs with business data, so they visually contextualise business-critical information.
    • Detecting equipment anomalies: Using AI, asset operators can proactively address potential breakdowns based on sensor data collected from smart devices and edge gateways. This new capacity utilises the cutting-edge Cumulocity IoT platform from Software AG, which is planned to be embedded in the SAP Asset Performance Management application in Q3.
    • Improving field response: Customers can optimise driving routes and allocate job assignments efficiently with integrated real-time traffic data and machine-learning-trained models, which enable the right field service technicians to reach their destinations on time.

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