Today’s Best-in-Class Business Performance Won’t Cut It Tomorrow Bottom-Line Impact on Non-Digital vs. Digital Manufacturers 60% of companies expect to be disrupted are not ready to meet these changes want personalized and sustainable products and shopping experiences can mean the difference between being able to adapt to new business models and not being able to adapt by digitally enabled competitors within 3 years Digital consumers Manufacturing supply chains Digitally enabled supply chains 1.2% 2.3% -3.1% -2.1% Digital Manufacturers Non-Digital Manufacturers Revenue Growth Profit Growth Supply Chain Performance Impacts Challenges and Priorities Top 3 Challenges for Manufacturers Top 3 Priorities for Manufacturers 35% 31% 25% New markets New markets Flexibility Managing operational risk Supplier costs Supply chain disruption 31% 29% 21% The Solution: An Intelligent Digital Supply Chain It begins with product or service design and ends with post-sale support. Intelligent procurement is critical to enabling the thinking supply chain. Supply Chain Design Supply Chain Planning Supply Chain Execution Manufacturing Operations Management Scenario/What If Inventory Optimization Factory Run Strategies Transportation Order Management Global Trade Warehousing Quality MES PLM Control Source: IDC, 2018 Process Planning Product Planning S&OP Supply Planning Demand Forecasting & Sensing LSP Network Optimization Supply Network Optimization CAD, CAM, CAE How Organizations Get to a Collaborative Supply Chain Supply Chain Maturity Progression 1 2 3 4 5 AD HOC OPPORTUNISTIC REPEATABLE MANAGED OPTIMIZED Resistant Reactive Connected Resilient Proactive Supply chain is focused solely on functional metrics and performance, without due consideration of the power and disruptive potential of digital technology. Some digital capabilities are in place and the beginnings of supply chain resilience are established, but tools are underutilized and disconnects still exist. Cross-functional alignment drives the adoption of digital competencies; efficiency is maximized and the supply chain is resilient to external disruption. Digitally enabled, thinking supply chain is part of enterprise- wide functional engagement, to respond to external supply chain disruptions and drive new, innovative supply chain approaches. The importance of digital transformation in the supply chain is understood, but there is still a predominant focus on cost efficiency, and the ability to move beyond supply chain functional silos is limited. The Potential for Dramatic Benefits More effective product innovation Superior financial performance Better service performance Faster, more nimble responses Less system disruption, better response Less waste About SAP Ariba SAP Ariba is how companies connect to get business done—across direct, indirect, and MRO spend. Leading enterprises use SAP Ariba Solutions for Direct Spend to extend their intelligent enterprise transformation to their raw material, ingredients, and components suppliers; contract manufacturers; spare parts providers; third-party logistics providers; and other key trading partners. These industry-specific solutions help companies manage source-to-contract processes and collaborate on supply chain planning and execution processes. This helps them gain more value from their ERP, PLM, and supply chain planning systems while controlling spending, reducing inventory, and improving on time in full. And trading partners connect with profitable customers and efficiently scale existing relationships—simplifying sales cycles and improving cash control. All IDC research is © 2019 by IDC. All rights reserved. All IDC materials are licensed with IDC’s permission and in no way does the use or publication of IDC research indicate IDC’s endorsement of SAP’s products or strategies. Document #US45748719 in the Modern Digital Economy Supply Chain Competitive Differentiator An IDC infographic, sponsored by SAP Ariba For additional information, please see how SAP Ariba Solutions for Direct Spend support companies in chemicals, life sciences, high tech, industrial manufacturing, consumer products, retail industries, and more: http://ari.ba/discrete-manufacturing-solutions http://ari.ba/process-manufacturing-solutions http://ari.ba/consumer-industries-solutions http://ari.ba/mro-solutions & Direct Procurement as a Source: IDC 2018 Supply Chain Survey, N = 502 Source: IDC 2018 Supply Chain Survey, N = 502 Source: IDC 2018 Supply Chain Survey, N = 502