Recent flooding in southern Spain has highlighted the vulnerability of supply chains, causing container backlogs in the Port of Valencia and resulting in production delays, shortages, and rising prices. Juan Cartier, Chief Revenue Officer at SAP EMEA, emphasized that artificial intelligence (AI) can play a crucial role in addressing these challenges.
Cartier noted that changes in trade policies, such as new tariffs, can significantly impact supply chains, forcing companies to reconsider their suppliers and production locations. He stressed the need for businesses to be proactive in their planning to better prepare for unexpected disruptions.
According to Claus Jensen, Director at SAP's Global Center of Excellence for Digital Supply Chain, companies often focus on reactive measures rather than addressing the root causes of their supply chain issues. He stated, "We are too busy putting out fires. We need to learn to plan proactively to avoid being caught off guard by market changes."
Cartier identified the siloed operations within companies as a fundamental problem, where departments operate independently and share insufficient information. This lack of communication can lead to inefficiencies and increased costs. He explained, "When information is not shared, companies miss critical opportunities to respond effectively to market changes."
Jensen compared this situation to a dysfunctional family dinner, where everyone shouts without listening. He argued that breaking down these silos is essential for future-proofing business operations.
Integrated planning is key to overcoming these challenges. Jensen explained that effective planning requires collaboration across departments to make decisions based on a shared understanding of market opportunities and capabilities.
SAP's Integrated Business Planning (IBP) offers a solution to improve interdepartmental collaboration. AI can enhance this process by enabling natural language communication with the platform, allowing users to make informed decisions more easily.
One example is SAP's AI assistant, Joule, which consolidates data from various systems and provides insights in natural language. Cartier highlighted Joule's ability to answer questions and connect information across systems, aiding decision-making.
Carlos Portillo, AI Product Marketing Manager at SAP, emphasized the transformative potential of AI in analyzing vast amounts of data to aid demand planners in navigating complex scenarios. He stated, "AI helps to create a comprehensive picture and make the best decisions in the end-to-end supply chain."
Cartier urged organizations to adopt integrated planning swiftly, as improving supply chains can create competitive advantages. He noted a shift in perspective, with Chief Supply Chain Officers increasingly participating at the executive level, underscoring the strategic importance of supply chain management.