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Another year of disruption? SAP’s 2022 Predictions for the Supply Chain

Another year of disruption? SAP’s 2022 Predictions for the Supply Chain 1

While we thought 2020 might have gone down in history as the year of supply chain disruption, 2021 gave it a run for its money. Turn back the clocks to last year and we were anxiously awaiting the vaccine rollout and the return to life as we knew it before Covid. Fast forward to today, and while the majority of us may have been jabbed, we’re still witnessing the ongoing effect of the pandemic wreaking havoc worldwide with widespread supply chain disruption.

However, despite these great struggles we’re no longer desperately searching for loo roll in our supermarkets and, thankfully, we’ve seen businesses across the globe gradually rebound and seek solutions to manage their ongoing sourcing and supply chain challenges. SAP asked its global thought leaders for their perspective on what to watch out for in 2022, and here’s what they had to say:

“The impact of the pandemic-driven lockdowns underscores how the global economy is a networked economy. Companies know that no business does business alone – success depends not only on one company’s ability to deliver, but the abilities of all companies in its entire supply chain. To adapt to ever-changing business challenges, procurement and supply chain leaders will increasingly look to cloud-based and network-aware solutions to deliver the innovation they need to continually align their spend strategy to their business strategy.  – John Wookey, President, Intelligent Spend and Business Network, SAP

“Clogged cargo ports, backlogged railyards, microchip and gas shortages…18 months later and we are still feeling the economic aftershocks of the disruption brought on by Covid-19. We had hoped that business would get back to ‘normal’ in 2021. As we enter a new year, we realise that ‘disruption is the new normal’ and resilience is a top priority. In 2022, companies need to formalise resilience, building sustainable supply chain execution that supports business growth. Despite the volatility, organisations must take a step back and look at spend holistically. An integrated spend management approach spanning procurement, external workforce and travel and expense management, will provide customers with the visibility and agility they need to adapt to changes in their markets while continuing to drive their business objectives.” – Etosha Thurman, Chief Marketing and Solutions Officer, Intelligent Spend and Business Network, SAP

“It has been nearly two years since the pandemic began wreaking havoc on the world’s businesses, exposing the fragility of linear supply chains and the need for a more networked economy. During this time, many businesses have changed their view of procurement from cost watchdog to that of a strategic enabler. As we enter 2022, many procurement leaders are tasked with aligning every spend decision to their overall corporate strategies. To best deliver on this responsibility, these professionals will need an integrated view of total spend across the enterprise and deep into their supply chain. This level of visibility will enable the necessary information sharing and collaboration needed to contribute to stronger business benefits, including better inventory management, more predictable lead times, alternative sources of supply, stronger supplier compliance and, of course, continued cost savings.” – Jeff Collier, Chief Revenue Officer, Intelligent Spend and Business Network, SAP

“2021 has been the year of supply chain disruption. People who have never heard the term supply chain before are now talking about it as everyone is experiencing stock shortages in stores and lack of availability of the holiday gifts we had planned to buy. Recent events like Covid and Brexit have shown that traditional, linear, fragmented supply chains no longer work, and no business can do business alone. Companies will look to move beyond enterprise-centric systems toward those that are designed for cross-company transparency and collaboration. A digital network approach can transform fragmented supply chains into unified, collaborative, intelligent networks for supply, logistics, asset management, and service. With tighter collaboration between trading partners on a trusted network, companies can better anticipate shifts in supply and demand, deepening their competitive edge in the face of profound disruption.”- Paige Cox, Senior Vice President and Head of Business Network, SAP

“If 2021 has taught us anything, it is that even the best of predictions failed to anticipate some of the challenges the world has seen. What did occur though was that procurement organisations moved away from simply managing and optimizing processes to becoming pivotal in solving critical business problems. In 2022 procurement professionals should be bold in embracing this mandate and propose solutions that help companies navigate troubled, uncertain waters. Creative procurement solutions can address some of the biggest challenges businesses continue to face today: managing supply shortages, rethinking a globalised supply chain, leaning on a vibrant external workforce in the face of the Great Resignation, and focusing on working capital at a time of increasing global inflation. Let’s be bold and re-define traditional paradigms to tackle these challenges.” – Baber Farooq, Head of Market and Solution Strategy, Procurement Solutions, SAP

“Sustainability and social responsibility are some of the most pressing issues we’re dealing with today. The recent UN Climate Change Conference of the Parties (COP26) brought representatives from nearly 200 countries together in the fight against climate change. Individuals and businesses alike must heed the urgent call to make drastic changes to help the environment and to stick to ethical principles. I believe that procurement can play an essential role in leading the charge to create a long-term strategy that embeds sustainable and ethical factors in the process from start to finish. While new and emerging solutions are on the horizon to enable these long-term plans, leaders will look to their digital procurement solutions in use today to support environmental, social and governance goals like reducing carbon emissions or banning child labor. Over the next few years, we’ll see further investment in core procurement technology to help businesses achieve more than just operational efficiencies and cost savings, but also to drive risk mitigation and increased visibility into the supply base and supply chain processes to achieve ESG goals.” – Salvatore Lombardo, Senior Vice President and Chief Product Officer, Procurement Solutions, SAP

Without a doubt, 2021 presented new challenges. But this has ultimately led to new thinking and the acceleration of the adoption of new technologies. With such progress made, 2022 could be the year we overcome existing supply chain challenges to herald a new dawn of how businesses approach procurement.

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