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By David Dunn, Director of Global Industry Marketing, SAP

The high tech industry has become a beacon of social change and business transformation. However, while change is good, it’s becoming more challenging to achieve due to material shortages, rising energy prices, and expanding geopolitical turmoil that delay shipments and hinder product availability.

To minimize these shocks now and in the future, midsize high tech firms are prioritizing initiatives that improve supply chain resiliency. According to an IDC Info Snapshot, sponsored by SAP, efforts at the top of their agendas include turning to technology to bolster their supply chain management (52%), diversifying their catalogs of suppliers (47%), and relying on financial hedging for price stability (42%).

Like the products, components, and subcomponents they design and manufacture, these growth-focused industry players must become interconnected – marrying cross-business insights, collaboration, and data-driven decision-making. This type of preparation is particularly critical when experiencing tight reserves of resources and cash flow.

Evolving the “brain” behind the supply chain


It’s no secret that most midsize high tech firms are part of a much larger supply chain. Whether delivering components or assembling the final product, they help shape smart products that businesses and end customers rely on to stay connected, respond to change, and make decisions with data-driven agility. And as data insights, people, and processes become more interconnected, high tech innovations become more intelligent and reliable.

The same can be said for supply chain resiliency. Connecting the supply chain – from capacity and output forecasting to shipping and material availability – helps optimize critical improvements, including predictable cadence of material ordering, creation of sourcing channels, and enhancement of sales and operations planning.

HMD Global OY is a prime example of a business interconnecting data, people, and processes to fuel growth. The mobile phone manufacturer applies an IT design strategy focused on process standardization and cloud-based operations. In return, the company is well-positioned to deliver continuous improvements in business process efficiency, functionality, and automation, which significantly decreases the workload across its business network.

For instance, the task of integrating HMD systems with supplier systems shifted to the suppliers themselves. Suppliers are even given an integration guide to complete the straightforward process. HMD is also leveraging automation capabilities to keep staffing levels and costs in check even as the business grows, helping to ensure success well into the future.

How do companies such as HMD achieve this level of advanced planning and high productivity? The answer is modernizing their IT landscape with a cloud-based ERP that’s not only scalable but also can be fully integrated with an extensive partner network, all while requiring less cost and headcount to run.

Driving operational efficiency with insight and productivity


Traditionally, business management systems, such as ERP software, have been used for cost reduction and process automation. But as ERPs gradually evolved in the cloud, supply chain value expanded with the ability to interconnect company-wide data, people, and processes with regular updates that include the latest technology.

Through this increased level of insight, midsize high tech firms can dramatically improve on-time delivery of customer shipments, quickly respond to supply and demand changes, and proactively identify potential breakdowns and recommended resolutions. Additionally, they can leverage dashboards based on embedded, configurable business rules and algorithms. This capability helps determine preemptive responses to market shifts with real-time transparency into supply availability across multiple time horizons.

These operational improvements manifest into strategic outcomes, such as lower carrying costs, higher productivity, and optimized inventory. For example, a supply chain manager can rapidly pinpoint which suppliers can commit to the needs of a high-growth forecast and get them ramped up with minimal cost and complexity.

In return, the business model becomes more demand-driven, boosting service levels and reducing excess buffer inventory. Supply chain departments replace periodic information exchanges with standardized, continuous vendor collaboration. Quality and testing documentation is digitally exchanged with customers and vendors to help ensure specifications and requirements are met. Even quality inspections, the transfer of unrestricted stock, and customer deliveries are accelerated as vendors align with the business to resolve potential issues before they become customer complaints.

Achieving value through business agility


Midsize high tech firms are certainly no strangers to the unpredictability of customer demand, economic volatility, and an ever-evolving industry. But as they modernize their business management systems and processes with cloud ERP, they can find steady sources of revenue to combat the unknown. And more importantly, they can tap into the latest technology to get a complete picture of their supply chains and alleviate headaches for themselves, their vendors, and their customers.

Discover IDC research insights into how high-tech companies innovate with new business models and services to drive growth. Read the IDC Info Snapshot, sponsored by SAP, “Midsize High-Tech Companies Focus on Planning and Predictability.”

This article was originally posted on Forbes.com