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Accenture, SAP partner on supply chain visibility

A partnership between Accenture and SAP builds supply chain capabilities on SAP IBP that enables organizations to identify and respond to changes in supply, demand and inventory.

Accenture and SAP are partnering to develop capabilities for better supply chain visibility and lower risk.

The partnership integrates the capabilities into SAP Integrated Business Planning for Supply Chain (IBP) that are designed to help companies identify and respond to changes in supply, demand and inventory, according to Accenture.

This "nerve center" provides organizations with visibility and mitigation capabilities that are more suitable than traditional business planning applications for today's more complex supply chains, according to industry analysts.

The nerve center uses cloud resources, data from disparate sources, generative AI (GenAI) and analytics to provide ways for organizations to gain visibility into deeper supply chain levels, according to Michel Roger, global SAP supply chain leader at Accenture.

Organizations can then identify risks or issues that extend beyond their tier 1 or tier 2 suppliers and make decisions for mitigating risks or determining factors such as their suppliers' adherence to environmental, social and governance requirements.

The supply chain nerve center is built on the SAP Business Technology Platform development environment, which includes data integration platform SAP Datasphere, according to Roger. It is centered on SAP IBP and can connect to other SAP applications, including SAP S/4HANA, SAP Business Network, SAP Extended Warehouse Management, SAP TM Transportation Management and SAP Analytics Cloud.

"SAP applications comprise the data and application layer for the nerve center," Roger said. "The data serves as the foundation for insights and resulting actions trigger execution in SAP supply chain applications, leading to more advanced and resilient supply chains."

The nerve center includes a supply chain resilience stress test developed by Accenture and MIT that can assess potential supply chain failure points, financial risks and mitigation strategies and actions. It also includes digital twin software from Cosmo Tech that can simulate supply chain behavior under various stresses and help build planning process mitigation plans.

The Accenture supply chain nerve center is available now, and some packaged components are being used by Accenture customers, according to Roger. One global consumer products company is using the resilience stress test to identify risks in its supply chain and bolster its business continuity plans.

Pricing for the nerve center capabilities was not available.

Traditional IBP not enough for today's supply chains

The partnership makes sense, as linear supply chain planning in traditional IBP process software applications are not sufficient for the volume and the variety of disruption today, said Douglas Kent, executive vice president of corporate and strategic alliances at Association for Supply Chain Management.

"The systems were built to manage linear supply chains -- not these massive, integrated bidirectional systems that are necessary for tomorrow," Kent said. "It's not a surprise that you have an integration partner like Accenture and a technology partner like SAP working together to try to make that work."

A platform that can access bidirectional internal and external signals and assess what's happening becomes vital for building accurate plans, he said.

"This was well illuminated during the pandemic," Kent said. "For example, if you look at what happened in the automotive industry, why wouldn't they have known that there was going to be a potential chip shortage at the time in which they were re-ramping up production?"

Automotive manufacturers are massive and mature organizations that should have been aware that the same critical sources of supply for integrated circuits were being consumed by other industries outside of their sector, he said.

"They should have been able to bring those external signals into their own planning and didn't need to introduce that shortage of supply risk into the system because they would have seen it and planned for it," Kent said.

The partnership between Accenture and SAP to offer this supply chain nerve center will help organizations deal with a more dynamic world and ongoing supply chain disruptions, he said.

"We have to build better planning systems to capture information and build more accuracy into plans, because the resiliency cannot be answered by inventory; that's a losing equation," Kent said. "Bearing the risk with inventory investments tends to be where we like to go, but it's a costly strategy, as many organizations have found out."

For years, organizations have built supply chains that provided initial visibility into tier 1 suppliers, but now they need to go deeper into the supply chain, according to Michael Dominy, vice president of supply chain research at Gartner.

IBP is not new, but now it's about adding additional data elements and insights into that process enabled by the IBP technology.
Michael DominyVice president of supply chain research, Gartner

"IBP is not new, but now it's about adding additional data elements and insights into that process enabled by the IBP technology," Dominy said.

The nerve center capabilities that Accenture is building in SAP IBP enables organizations to bring in unstructured data and integrate it with the traditional structured supply chain data, he said. This provides more information that organizations can sift through to provide advanced indication of potential disruption problems.

The nerve center concept is modeled after the body's nervous system, which gathers signals and sends messages to the brain. In this case, SAP IBP is acting as the brain of the supply chain system, Dominy said.

"It's about sensing what's happening, and then it can feed a control tower," he said.

The challenge for organizations won't be around technology, however. It will be around the governance and the decision-making that happens within the organization, Dominy said.

"That's where the struggle is -- can you get folks aligned around a plan using your own data," he said. "Having GenAI and large language models and bringing in the other data sources is all well and good, but if you can't get people within your own company to commit to a plan and execute on the plan that you're aligned around, it isn't going to make that much of a difference."

Getting value from these advanced capabilities will be challenging, Dominy said.

"In theory, it all sounds great, but so many companies are just struggling to get a well-functioning IBP process working within their direct supply chain that trying to incorporate GenAI and all these other data sources is pretty far off the roadmap for most companies," he said.

Jim O'Donnell is a senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.

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