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Enterprises Using Supply Chain Processes Of The Past Will Struggle In The Future

Lindsey LaManna

With changing customer expectations and extraordinary demands on our physical future of resourcesresources in today’s global economy, supply chains are becoming more complex. Businesses are being forced to rethink resource optimization and reinvent the supply chain.

In our last interview in the Future of Resources series, James Marland explained how the growing network of suppliers and partners and the“sharing economy” are transforming the supply chain.

This week, Keertan Rai (@Keertanrai), Solutions Marketing Manager for Ariba, shares his insight on the changing landscape of resource optimization and how businesses must adapt.

Customers are demanding faster and more personalized products and services? In this context, how can enterprises address the resource optimization challenges that emerge as a result of that?

The constant shift in customer dynamics has and will continue to play a critical role on resource accessibility and utilization. Enterprises that choose to address these changes by only leveraging processes and expertise of the past have often found themselves hard pressed in striking the right balance in managing cost, quality and agility.  In the networked economy era that we are in today, organizations are better placed that ever to address such challenges.  Be it through new supply source discovery at the click of a button, seamless collaboration across all participants and processes, and elimination of manual processes, business networks have enabled enterprises to access new resources as well as optimize the usage of the existing one’s in their quest to remain nimble to the changing market environment.

How would timely and accurate insight impact resource utilization across the entire supply chain from initial design and demand to delivery?

There goes a saying that you can’t fight what you can’t see. Right utilization of resources begins with good visibility in to the supply chain. The impact is huge and across the board too.  Proactive identification and mitigation of supplier risks, material and inventory cost containment, accurate sourcing decisions enablement, supplier performance management, working capital optimization are just a few examples of how enterprises have gained with timely and accurate insights on their supply chains.  However visibility on enterprise data in its native form would provide limited insights because of the inherent inaccuracies and inconsistencies.  Its only when enterprise wide data is well aggregated, classified, enriched and analyzed does the big picture begin to emerge. Also by taking business commerce beyond the four walls of the enterprises and by providing an ever greater transparency on transactions and the ecosystem, Business Networks have created a paradigm shift on resource visibility and utilization across the supply chain.

The idea of sustainability remains mostly an idea. What things need to happen in order for it to become more of a reality in supply chains?

Sustainability today is no longer a buzzword, it’s a business imperative. Time and again we have witnessed enterprises on the wrong side of the sustainability equation facing the squeeze from competitors, clients and governments alike.  While enterprises, to some extent, have managed to bring about the sustainability change internally, it is the task managing it across their supply chains that remains a challenge. Poor visibility on the supplier base and lack of accurate information are often the culprits to blame to here.  Using supplier data enrichment and supplier performance solutions, organizations today stand to know exactly how green, sustainable and diverse their supply chain is.  Empowered with this ability to track and validate supplier initiatives, organizations are able to place the importance of sustainability practices to their supplier base and thus set off a cascading effect across the ecosystem.

Keertan RaiKeertan Rai handles product marketing for Ariba’s Spend Visibility solution. He has over 7 years of experience across multiple B2B marketing disciplines in the IT products and services industry. Prior to Ariba, he was with Microland Limited and HCL Technologies in corporate and solutions marketing roles. Keertan holds an engineering degree in Computer Science from Visvesvaraya Technological University, India and an MBA in Marketing and Finance from Amity Business School, India.

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About Lindsey LaManna

Lindsey LaManna is a Marketing Manager at SAP. Her specialties include social media marketing, marketing strategy, and marketing communications.

How Blockchain Technology Can Help IT Become The New Hero For Aerospace Business

Thomas Pohl

IT professionals can become the new heroes in aerospace and defense (A&D) companies by using transformative new technologies productively and imaginatively. With so many new and pervasive technologies coming to market, it can be difficult to keep up with the pace of technology change. For example,

  • How do you incorporate these tools?
  • Which ones do you need?
  • How do you choose wisely and avoid letting your company fall behind the competition?

Finding value in the technologies you choose will be the essence of your company’s success. In the A&D industry, weapons systems, aircraft features, and the demand for everything-as-a-service are changing faster than ever before.

In today’s A&D market, the ability to adjust to change is everything. And it’s up to IT to provide the technology and skills that will allow A&D companies to transform themselves and to succeed. The rapid introduction of technology innovations can be overwhelming; the trick is to keep new technology from becoming a distraction.

It’s important to focus on choosing technology based on the value it can deliver to your company.

Blockchain – also known as the Internet of value

Let’s take a closer look into blockchain technology and how it can be applied to the aerospace and defense industry.

In the last year, you’ve probably heard about blockchain technology. But you may not know much about what it is, who is using it, and what they’re using it for in aerospace and defense.

Blockchain is a technology that uses cryptography, peer-to-peer networks, and consensus algorithms to form a “digital ledger” of transactions. Every participant in a blockchain can see those transactions that are verified and recorded in a “connected chain of information.” Blockchain allows participants to conduct business transactions directly with each other, eliminating the need for third parties, through built-in information transparency.

Early uses of blockchain included currency such as Bitcoin and payment infrastructures. A Canadian bank used it with their international transaction processing to reduce it from days to seconds – enabling businesses to perform secure international B2C transactions. A&D companies are looking into the opportunities that this new technology could offer.

Airbus – the search for the right blockchain applications

Airbus has been working to identify business challenges that blockchain can address. These include instances where there is a high cost of trust, a slow process but time-sensitive interactions, compliance issues, high overhead cost for data reconciliation, and multiple parties that need to share data.

“Blockchain is, in essence, a trust-building technology that facilitates exchanges and trust between parties, so it’s natural to be collaborative in the way we work on problem-solving and adoption,” says data science strategist Leon Zucchini at Airbus. To this end, Airbus’ chief technical organisation (CTO), digital transformation organisation (DTO), and information and communications technology (ICT) division have formed a blockchain working group within the company to search for the right application.

Airbus and SAP recently joined the Hyperledger project, an open source collaborative effort created to advance the cross-industry use of blockchain technology.

Blockchain applications in aerospace identified by Airbus include:

  • Supply chain tracking: Using blockchain technology as a shared database with suppliers could help track the quality and compliance of products along the entire supply chain
  • Procurement support: By creating joint, trusted records of exchanges between partners, blockchain could help improve procurement processes
  • Revenue sharing: For services that are provided on a digital platform, blockchain can help distribute revenue fairly and transparently

Lufthansa – generating more transparency in aircraft maintenance

Patrick Goetze at Lufthansa sees a huge potential benefit with blockchain as a neutral information documentation system. With the way information is stored in blocks, which are verified and sealed, the information contained cannot be changed and is saved in such a way that it is visible for everybody. This transparency makes it extremely difficult to corrupt and manipulate the information and is of particular benefit if different companies are working together and therefore using the same data – for example in aircraft maintenance.

After they are manufactured, aircraft components could be registered in a blockchain together with all relevant data, including serial codes. If a component is installed in an airplane, this information can be saved in yet another blockchain. If the part malfunctions, maintenance technicians can use the information stored to review the exact number of flight hours and to decide whether to replace or repair the part. If it is repaired, this information can then be saved in a separate blockchain for the component in question.

Other blockchain application scenarios in aviation include the secure management of certification from aviation authorities and technicians’ job cards.

Blockchain may be the answer for better cybersecurity

When it comes to protecting digital assets, the banking and A&D industries have a lot in common. Both need a safe way to communicate and conduct transactions across the global value chain.

In the A&D industry, however, cybersecurity needs to extend from the Defense Department to the manufacturer to its suppliers and throughout the complete ecosystem. The industry is realizing that blockchain may offer an answer.

Last fall, the U.S. House of Representatives passed a non-binding resolution calling for a national technology innovation policy. It includes language that supports digital currencies and blockchain technology. Rep. Michael Burgess, a Republican from Texas, said at the hearing: “There’s no doubt that blockchain innovations are on the cutting-edge today.”

Are you looking to innovate with blockchain technology in aerospace and defense? Do you want to become the new hero to your business? At SAPPHIRE NOW, you can visit with the SAP A&D experts and see the latest technologies and solutions in action. Learn more about SAPPHIRE NOW and secure your spot today!

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Thomas Pohl

About Thomas Pohl

Thomas Pohl is a Senior Director Marketing at SAP. He helps global aerospace and defense companies to simplify their business by taking innovative software solutions to market.

Industry 4.0: Digital Transformation In Manufacturing

Sandeep Raut

Manufacturing companies have traditionally been slow to react to the advent of digital technologies like intelligent robots, drones, sensor technology, artificial intelligence, nanotechnology, and 3D printing.

Industry 4.0 has changed manufacturing. At a high level, Industry 4.0 represents the vision of the interconnected factory where all equipment is online, and in some way is also intelligent and capable of making its own decisions.

The explosion in connected devices and platforms, combined with the abundance of data from field devices and the rapidly changing technology landscape, has made it imperative for companies to quickly adapt their products and services and move from the physical world to a digital one.

Today, manufacturing is transforming from mass production to an industry characterized by mass customization. Not only must the right products be delivered to the right person for the right price, the process of how products are designed and delivered must be at a new level of sophistication.

The first step in digitization is to analyze the current state of all systems, from R&D, procurement, production, warehousing, logistics, and marketing to sales and service.

The digitization of manufacturing impacts every aspect of operations and the supply chain. It starts with equipment design and continues through product design, production process improvement, and ultimately, monitoring and improving the end user experience.

Digital transformation revolutionizes the way manufacturers share and manage product and engineering design specs on the cloud by collaborating across geographies.

Downtime and reliability are critical when it comes to the operation of equipment on a shop floor. Big Data analytics offers quick and easy access to operation, production, inventory, and other quality data, which enables managers and operators to adjust machines as needed across the enterprise.

Quality and yield are directly related to manufacturing processes, as the way that raw materials are used, inspected, manufactured, and integrated really determines product quality. Cognitive computing helps manufacturers identify quality issues more efficiently, increases production yield, and reduces problems that lead to service and warranty costs.

Implementing smarter resource and supply chain optimization strategies improves the cost efficiency of resources like energy consumption, worker safety, and employee resource efficiency.

Service excellence is also an important element of a manufacturing company’s digital transformation strategy. Connected devices and the Internet of Things (IoT) are changing how after-sales service is delivered. Here are a few examples from industries such as industrial equipment, power generation and HVAC providers:

  • Push service notifications
    • How is your asset health?
    • How is your asset usage?
  • Predictive/preventive maintenance
  • Breakdown assistance
  • Usage-based billing
  • Spare parts fulfillment

General Electric’s jet engines combine cloud-based services, analytics, and online sensors to report usage and status and help predict potential failures. The result is improved uptime and lower cost of ownership.

Additive manufacturing (3D printers) for prototyping help shorten the iteration cycles in the design process and help turn innovation into value. 3D printing is also quickly gaining ground in low-volume commercial manufacturing of customized products.

Smart machines integrated with forklifts, storage shelves, and production equipment are able to take autonomous decisions and communicate with each other to drive material replenishment, trigger manufacturing, and much more.

Industry 4.0 allows manufacturers to have more flexible manufacturing processes that can better react to customer demands.

For more on the impact of digital transformation in manufacturing and other industries, see Live Product Innovation, Part 3: Process Industries, IoT, And A Recipe For Instant Change.

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The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


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To Get Past Blockchain Hype, We Must Think Differently

Susan Galer

Blockchain hype is reaching fever pitch, making it the perfect time to separate market noise from valid signals. As part of my ongoing conversations about blockchain, I reached out to several experts to find out where companies should consider going from here. Raimund Gross, Solution Architect and Futurist at SAP, acknowledged the challenges of understanding and applying such a complex leading-edge technology as blockchain.

“The people who really get it today are those able to put the hype in perspective with what’s realistically doable in the near future, and what’s unlikely to become a reality any time soon, if ever,” Gross said. “You need to commit the resources and find the right partners to lay the groundwork for success.”

Gross told me one of the biggest problems with blockchain – besides the unproven technology itself – was the mindset shift it demands. “Many people aren’t thinking about decentralized architectures with peer-to-peer networks and mash-ups, which is what blockchain is all about. People struggle because often discussions end up with a centralized approach based on past constructs. It will take training and experience to think decentrally.”

Here are several more perspectives on blockchain beyond the screaming headlines.

How blockchain disrupts insurance, banking

Blockchain has the potential to dramatically disrupt industries because the distributed ledger embeds automatic trust across processes. This changes the role of longstanding intermediaries like insurance companies and banks, essentially restructuring business models for entire industries.

“With the distributed ledger, all of the trusted intelligence related to insuring the risk resides in the cloud, providing everyone with access to the same information,” said Nadine Hoffmann, global solution manager for Innovation at SAP Financial Services. “Payment is automatically triggered when the agreed-upon risk scenario occurs. There are limitations given regulations, but blockchain can open up new services opportunities for established insurers, fintech startups, and even consumer-to-consumer offerings.”

Banks face a similar digitalized transformation. Long built on layers of steps to mitigate risk, blockchain offers the banking industry a network of built-in trust to improve efficiencies along with the customer experience in areas such as cross-border payments, trade settlements for assets, and other contractual and payment processes. What used to take days or even months could be completed in hours.

Finance departments evolve

Another group keenly watching blockchain developments are CFOs. Just as Uber and Airbnb have disrupted transportation and hospitality, blockchain has the potential to change not only the finance department — everything from audits and customs documentation to letters of credit and trade finance – but also the entire company.

“The distributed ledger’s capabilities can automate processes in shared service centers, allowing accountants and other employees in finance to speed up record keeping including proof of payment supporting investigations,” said Georg Koester, senior developer, LoB Finance at the Innovation Center Potsdam. “This lowers costs for the company and improves the customer experience.”

Koester said that embedding blockchain capabilities in software company-wide will also have a tremendous impact on product development, lean supply chain management, and other critical areas of the company.

While financial services dominate blockchain conversations right now, Gross named utilities, healthcare, public sector, real estate, and pretty much any industry as prime candidates for blockchain disruption. “Blockchain is specific to certain business scenarios in any industry,” said Gross. “Every organization can benefit from trust and transparency that mitigates risk and optimizes processes.”

Get started today! Run Live with SAP for Banking. Blast past the hype by attending the SAP Next-Gen Boot Camp on Blockchain in Financial Services and Public Sector event being held April 26-27 in Regensdorf, Switzerland.

Follow me on Twitter, SCN Business Trends, or Facebook. Read all of my Forbes articles here.

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