How CloudPaths Makes Supply Chains Smarter

The supply chain management area has changed significantly in recent years. Following the COVID-19 pandemic, suppliers have entered a period of shortages, forcing businesses to alter how they do business and take raw material constraints into account.

Many companies never had those constraints built into their planning and did not understand the financial impact they would have. Companies are now looking to run more scenarios to find out the projected impact if a supplier goes out of business or if it cannot deliver necessary packaging materials. Yet organizations lack the expertise needed to run these scenarios.

Many of these companies are turning to the supply chain experts at CloudPaths to address end-to-end planning and execution issues. CloudPaths has helped dozens of organizations increase their real-time supply chain visibility, collaborate with suppliers, and detect exceptions to help decision-makers adjust in a timely manner.

Defining Strategy

CloudPaths can offer assessment, process harmonization, system integration and other services in the following SAP areas:

• SAP Integrated Business Planning (IBP)
• SAP Business Network (Ariba)
• SAP S/4HANA Supply Chain
• Warehouse management
• Transportation management

But before deciding on which solution to leverage, it is important to have an evaluation period to determine which solution best suits a customer’s needs. Once that evaluation period is completed, then organizations can work with CloudPaths to map out a long-term strategy.

“We help our customers to define their strategy from the beginning, helping them to do an assessment of what is the best solution for them to solve different sets of problems. SAP has a plethora of different solutions that you can use, but it is important to know which solutions cater to which business problems. We define that with them. We’ve also worked with customers in assessing supply chain software as well, beyond the purview of SAP software to give them guidance in terms of whether SAP is the right fit or if they need to look for some other add on solutions to help with the specific use cases,” said Tushar Bhalla, CTO of CloudPaths.

Once the assessment is completed and the strategy is defined, CloudPaths also offers end-to-end implementations and integrations within SAP and non-SAP platforms. CloudPaths helps users leverage SAP IBP Sales & Operations Planning to balance supply and demand so companies can hit their financial targets.

Bolstering Forecast Accuracy

Automation and AI are hot-button topics in the SAP space, particularly within supply chain. Organizations are eager to find solutions that can provide real-time insights to help forecast supply and demand. SAP’s embedded solutions can forecast with some accuracy, but these features have their limitations. To bolster forecast accuracy, CloudPaths extended the IBP capabilities with external forecasting models available in Microsoft Azure and Google Cloud Platform.

“CloudPaths came up with very innovative ways of integrating external data and check for reliability and consistency of data streams to be able to create a more accurate forecast predictions at multiple different nodes of Supply Chain.” said Bhalla.

Client Proof Points

Among the clients partnered with CloudPaths to address pressing supply chain issues are large GPU semiconductor company and Behr Paints.

A large GPU semiconductor company was struggling with demand forecasting, had inefficient supply chain planning, inadequate reporting and analytics and was suffering from the inability to predict needed inventory. After partnering with CloudPaths and SAP IBP, NVIDIA improved its planning processes, reduced costs, and increased customer service levels. The implementation of allocation and order-based planning capabilities enabled NVIDIA to respond more effectively to customer demand through rules and segmentation to increase its competitive advantage in the market.

Behr Paints was constrained due to not having master data available to be able to manage their products, locations, costs, production, and transportation. Using SAP IBP Order Based Planning, SAP ECC, and SAP Optimization Service, the CloudPaths team enabled Behr Paints to develop a plan to operationalize, create batch filling for specific SKUs on a daily and weekly schedule, and create transport loads for optimized production, and inventory balance.  These processes significantly reduced costs to allow Behr Paint to focus on building their brand while serving the home improvement and builder marketplace.

Differentiators

With all the challenges in recent years, businesses are always looking for solutions that can help them run their supply chain more intelligently. Amidst the crowded SCM space within SAP, CloudPaths highlighted several key aspects of the business that make it a unique SAP solutions provider.

Experience – The team at CloudPaths comes from all different backgrounds and disciplines, helping customers address industry-specific challenges, whether that is food and beverage, tech, pharmaceuticals, and more.

Pre-built accelerators – Organizations partnering with CloudPaths get access to pre-built accelerators like    forecast de-biasing, pipeline predictability, forecast value add, and total margin management. This reduces time to value and helps decision-makers access crucial data they need to set up their businesses for long-term growth and success.

Milestone-based business – CloudPaths structures their engagements based on milestones reached and goals achieved, rather than time spent. This ensures customer satisfaction and generates positive word-of-mouth buzz throughout the SAP community.

“Often, we’re referred directly from SAP or repeat business. A supply chain officer goes from one company to another, they come back to who they trust. When we get these ‘transitional companies’ that have gone with other companies and had a bad experience, they didn’t get what they needed, we sometimes offer them a pilot program and the conversion on that is about 90%,” said marketing executive Jimmé Peters.

Planning Intelligence

Looking through 2024 and 2025, CloudPaths is planning to expand into all the different areas of supply chain solutions, including product lifecycle management (PLM) and other extended logistics planning spaces. The company is also working to develop large language model capabilities and use cases of those models within the supply chain planning framework. One of these use cases is to help customers understand the results that these LLMs provide.

“Supply chain planning is about these complex solving engines that you feed data into and then spit out results. The biggest failure of those LLMs has been that planners often don’t understand the complexity behind why it made a certain decision. We’re leveraging some of the LLM capabilities to make it easier for a planner to go in and ask, ‘if this is the result, explain to me why this happened,’” said Bhalla.

Learning, for instance, that an increase in customer spending results in a suggestion from the LLM to prepare for higher demand aids planners in their decision-making process and contributes to a smarter supply chain process.

What This Means for SAPinsiders

With all the uncertainty of recent years, those working in the SAP SCM space may not even know where to begin looking for solutions. Bhalla offered several key trends to keep an eye on.

Data – With the growing push to leverage AI and ML, companies must ensure that their supply chain data is cleansed, harmonized, and available in real-time. Organizations must have a solid foundation of data management practices to be able to leverage these advanced solutions correctly.

Focus on cost – The recent surge in demand led to increased costs for materials. This will likely lead to an increased focus on reducing those costs across businesses.

“Controlling the cost of materials and cost of transportation and being able to reduce the overall inventory cost of the capital that’s stuck in inventory will be the biggest driver of how companies should deal with their supply chain problems going forward,” said Bhalla.

Bhalla also predicted an increased focus on sustainability. As companies focus more on their environmental, societal, and governance (ESG) responsibilities, supply chain is one of the key areas where they will look to improve their sustainability. However, this cannot be accomplished without significant planning done ahead of time. Organizations that want to be more sustainable should work to lay out specific milestones and plan specifically how to get there.

Finally, Bhalla emphasized the importance of finding good partners to work with to meet supply chain goals. Companies should evaluate the track records of companies like CloudPaths to ensure that they are working with firms that have the expertise to deliver the specific solutions they are looking for.

“There are certain areas where you’re just not an expert, but there are other areas that are in your wheelhouse. You have to be able to differentiate that clearly and have that faith and that commitment,” said Bhalla.