Supply Chain Management Blogs by SAP
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Product and Topic Expert
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According to a recent IDC InfoDoc sponsored by SAP, midsize businesses expecting an average of over 10% increases in both revenue and market share growth rely on sourcing from several suppliers (71%) and source from different countries (67%). And they’re going even further by considering supply chain traceability initiatives to improve their sustainability performance (72%).*

Because sustainability is multidimensional, diversification requires that businesses have a well-rounded understanding of the influence and power of their unique supply chain model. Employees, stakeholders, vendors, and decision-makers must understand how the supply chain performs, which suppliers contribute to a greener business model, and what changes can impact the rest of the business.

Impacting supply chains and beyond

Midsize companies with a backbone of data and process-enabling technology are best positioned to obtain the scope, speed, and scale to drive a meaningful diversification strategy with capabilities including:

  • Visibility into the comingled materials flowing through various parts of their supply network

  • Insights into vulnerability to socially and ecologically disruptive practices and opportunities to improve these practices within every tier of their operations

  • The ability to record and report required ESG data across various frameworks and act on it company-wide

Supply chain organizations can steer such a complete, interdependent assessment – from product design to everyday operations – by using integrated and modular technology available through cloud ERP and supply chain solutions. Then, they can make decisions that strengthen individual functions with outcomes that do not sacrifice improvements in supply chain sustainability.

Enabling a sustainable product lifecycle

As midsize companies look to produce products more sustainably, they need to have complete visibility of the carbon footprint across a product's lifecycle, from the materials going in them, to how they are manufactured, delivered, and used as a finished product. They also need to help ensure that every ounce of material can be reused, repurposed, recycled, or returned to the earth at the end of the product’s life.
Discover the eight growth strategies practiced by leading midsize companies and learn how they can help you achieve your business goals. Get tips from the SAP-sponsored IDC InfoDoc "A Guide to Growth: A Global Analysis of the Defining Characteristics of Leading Midsize Companies."

This approach is a great example of the impact of intersecting supply chain diversification with sustainability. Understanding product and supplier sustainability footprints enable businesses to decarbonize their value chain and reduce waste. Meanwhile, diversification helps mitigate supply chain risk while reducing Scope 3 carbon emissions to meet sustainability goals – as alternate sourcing strategies can bring suppliers closer to the actual demand.

By integrating a cloud ERP with a product footprint management solution, companies can better contribute to the fight against climate change. They can calculate greenhouse gas (GHG) emissions from specific products while measuring key performance indicators for their environmental, social, and governance (ESG) commitments and goals. In addition, this approach helps ensure customers, business partners, and colleagues have access to real-time information in a collaborative work environment, regardless of distance and physical barriers.

Practicing responsible design and production

Increasingly, midsize companies are required to comply with extended producer responsibility (EPR) obligations and plastic taxes, as well as with corporate sustainability initiatives.

Cloud ERP – together with responsible design and production solutions – can facilitate a product and package redesign that enables companies to engage in the circular economy and reduces waste without sacrificing quality. With a modular design approach, this technology can help companies better optimize inventory while reducing waste and emissions. It also allows companies to replace a nonrecyclable subassembly with one that uses a greater number of sustainable materials without impacting the overall design.

Safeguarding and extending the brand

A sustainable supply chain diversification strategy can become a growth-focused company's brand guardian. It can drive the operational scope, speed, and scale needed to forecast demand, streamline logistics, and get real-time answers to complex questions, while also turning hard-won customer trust into ongoing growth and brand loyalty.

However, these advantages only happen with clean and connected data running on modern tools, including cloud-based ERP, predictive analytics, and automation solutions. By intelligently designing all the moving parts of their supply chains, midsize companies can pivot supply chain operations to not only become more resilient but also future-ready.

Discover the eight growth strategies practiced by leading midsize companies and learn how they can help you achieve your business goals. Get tips from the SAP-sponsored IDC InfoDoc "A Guide to Growth: A Global Analysis of the Defining Characteristics of Leading Midsize Companies."

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