SAP Re-Imagines Supply Chain Collaboration

SAP Briefing Note

By Daniel R. Matlis

SAP’s Life Sciences leadership team recently briefed Axendia on its re-imagined Supply Chain Collaboration strategy.

Globalization and outsourcing have increased the volume of geographically dispersed partners, facilities, and suppliers in the Life-Science global supply chain. This has resulted in increased supply chain risk and decreased predictability due to variability and complexity and increasing the impact of ‘Black Swan’ events on the healthcare ecosystem. 

Axendia’s research shows that Life-Sciences companies are making the transition to ‘Smart Sourcing’ to achieve visibility control and collaboration beyond the corporate four  walls across into their Value Network.  

Re-imagining Supply Chain Collaboration

To support re-imagined supply chain collaboration, SAP is expanding its offerings to the Life Science industry building on the strength of its Ariba supplier network to support multiple sourcing strategies, as well as the underlying procurement business processes.  

“As industry evolves its business, SAP offers a network that has an open, scalable framework on a business technology platform that can connect with various third parties,” said Mandar Paralkar, Head of Life Sciences Industry at SAP.  “In addition to financial transactions there is also a need for operational transactions which SAP’s S/4 HANA can support.    SAP S/4HANA is an enterprise resource planning (ERP)system with built-in intelligent technologies, including AI, machine learning, and advanced analytics.   SAP S/4 HANA has capabilities that can be leveraged by customers to identify attributes that go along with a product as well as providing a quality matrix to satisfy regulators,” he added.

Companies already using SAP ERP, Ariba or Fieldglass can act as a CMO when they have excess capacity beyond that needed to deliver their own products.  “A positive outcome from  the COVID pandemic is seeing  competitors come together to collaborate to use each other’s capacities, each other’s warehousing storage, in order to help and be prepared to distribute the vaccines,” said Paralkar.

Driving Growth in the Mid-market

As SAP works to expand their presence in the Life Science industries, it is seeing the advantages of mid-size companies to invest in SAP solutions. It is that perception in the market that SAP solutions only support big pharma and medical device companies.  However, SAP solutions are being used by mid-market life science organizations.

According to Paralkar, “Small and mid-size companies are adopting the SAP platform as they collaborate with the bigger Bio-pharma as suppliers, sub-contractors, joint ventures and other types of business relationships in the value chain.  SAP also works with value added reseller  partners across geographies  which helps with indirect channels to support our mid market customer needs.  As a result, SAP has seen traction in the mid-market by supporting new manufacturing strategies like make-to- order or assemble- to-order, batch/lot size of one and expanding its footprint beyond the four walls of the company to extend their supply chain.”

In Brief

SAP continues to leverage its strong presence in tier-1 pharma to re-imagine Supply Chain Collaboration across the value network by offering a network that has an open, scalable framework on a business technology platform that can connect with third parties.

In addition, the company is experiencing a surge in business from the mid-market.

We will continue to monitor SAP’s offerings in the Life-Sciences industries.

The opinions and analysis expressed in this Briefing Note reflect the judgment of Axendia at the time of publication and are subject to change without notice. Information contained in this document is current as of publication date. Information cited is not warranted by Axendia but has been obtained through a valid research methodology. This document is not intended to endorse any company or product and should not be attributed as such.