Supply chain management (SCM) is the backbone of industrial enterprises, functioning as the nerve center influencing their efficiency, cost-effectiveness, and competitive strength. It serves as a maestro directing a symphony of operations and harmonizing the movement of materials, products, and information.
However, the current industrial landscape is highly complex, requiring companies to navigate a maze of supply chain intricacies, demand fluctuations, inventory management, supplier partnerships, logistical challenges, and ever-rising customer expectations.
Fig 1. Supply chain process diagram
All these factors continuously impact their financial KPIs like the cost of goods sold (COGS), cash-to-cash cycle, inventory turnover, gross margin, and exposure. To flourish in this ever-evolving landscape, industrial enterprises require more than conventional solutions; they need innovation, flexibility, and a strategic approach to confront these challenges.
Nagarro understands SCM's pivotal role in the success of industrial enterprises. It's the backbone upon which operations are built, influencing efficiency, cost-effectiveness, and overall performance.
Nagarro offers a transformative toolkit that empowers industrial enterprises not only to endure but to excel amidst these challenges. We recently helped a manufacturing client transform their supply chain with great success.
This table shows a comprehensive view of the impact, which we also cover in significant detail in subsequent sections.
|20% reduction in supply chain disruptions||15% increase in demand forecasting accuracy|
|5% increase in overall revenue||8% decrease in stockout risk|
|15% reduction in carrying costs associated with excess inventory||25% enhancement in on-time deliveries from suppliers|
|10% decrease in procurement costs||7% reduction in operational costs|
Why do manufacturing companies need Snowflake's cloud-based data platform?
The manufacturing industry faces many challenges that often create an unpredictable environment for industrial enterprises. Before diving into how Snowflake Data Cloud helps address the challenges, let's look at them in more detail.
Globalization: Companies source materials and products from various countries and each country has its distinct regulations, customs procedures, and geopolitical factors that can disrupt the flow of goods. For instance, a sudden trade policy or tariff change can significantly impact supply chain efficiency and reliability.
Supply chain complexity: Modern supply chains have multiple layers of suppliers, distribution networks, and a wide array of product variations that make it difficult to gain a comprehensive view and exercise control.
Demand forecasting: Customer preferences and market conditions are constantly evolving. This, along with external factors such as natural disasters, economic fluctuations, or unexpected events like the COVID-19 pandemic can disrupt demand forecasts, making it difficult to ensure the right products are available at the right time.
Inventory management: Maintaining too much inventory ties up capital and increases storage costs. On the other hand, having too little inventory can result in stockouts, disappointing customers, and potentially losing sales. It's critical to maintain an optimum inventory level.
Supplier management: Building strong relationships with suppliers is crucial in today's global supply chains. It's not just about placing orders. Organizations require effective communication, supplier risk assessment, and performance monitoring. Supplier disruptions can have cascading effects on the entire supply chain, affecting production schedules and customer deliveries.
Logistics and transportation: Efficient transportation and logistics are essential for timely deliveries and cost control. Rising fuel costs, limited transportation capacity, and growing concerns about environmental sustainability add complexity to this challenge.
Customer expectations: Customer expectations are constantly evolving. They demand faster delivery times, personalized products, and real-time visibility of their orders. Meeting these expectations requires a highly responsive and efficient supply chain.
Companies need innovative strategies and tools like Snowflake's data platform to address them effectively to gain insights, optimize operations, and enhance their supply chain management.
How does Snowflake address these major supply chain challenges?
Snowflake Data Cloud helps industrial organizations overcome these supply chain challenges. Let’s understand how!
Data integration and centralization: Snowflake consolidates data from various sources, including the ERP systems, carrier datasets, and other internal systems, into a single source of truth, enhancing visibility across the supply chain and providing a comprehensive view that empowers data-driven decision-making for the companies.
Scalability and performance: With a scalable architecture designed to handle large data volumes, Snowflake Data Cloud ensures efficient data processing. It empowers supply chain professionals to make quicker decisions, even as data volumes grow.
Data analytics: Snowflake Data Cloud offers robust analytics capabilities that can help analyze historical data, identify purchase value trends, change market prices, and make data-driven decisions for supply chain optimization.
Real-time data: Snowflake Data Cloud supports real-time data ingestion and processing, enabling rapid responses to supply chain disruptions, demand fluctuations, and critical events that demand immediate attention.
Data security and governance: Snowflake Data Cloud prioritizes data security and regulatory compliance when dealing with sensitive supply chain data.
Cost efficiency: Snowflake's cloud-based model allows organizations to scale resources up or down as needed, helping optimize costs and ensuring resources are allocated efficiently.
Data sharing: Snowflake's data sharing features, such as the Data marketplace, drive collaboration across the supply chain network, improving coordination and responsiveness that further help overcome the challenges of complex supply chains.
Machine learning and predictive analytics: Snowflake integrates seamlessly with AI and machine learning tools, enabling supply chain professionals to build predictive models. These models forecast demand, optimize inventory levels, and predict potential disruptions, enhancing the agility and preparedness of the supply chain.
In essence, Snowflake's data integration, analytics, scalability, security, and real-time processing capabilities can significantly help organizations tackle the major challenges of a modern supply chain.
How Nagarro leveraged Snowflake Data Cloud to transform a manufacturer's supply chain
Nagarro works with leading global organizations and leverages tech innovation to address their unique supply chain problems. We recently partnered with a prominent manufacturer with a presence in the Middle East and African regions to build a Snowflake-powered supply chain solution.
The client struggled with inaccuracy in its demand forecasts due to economic fluctuations and changing customer preferences. Additionally, managing inventory across multiple production facilities demanded a balancing act.
They further wanted to improve stock management to avoid understocking and overstocking, affecting capital allocation, production schedules, and customer satisfaction.
Leveraging Snowflake for accurate demand forecasting and supply chain visibility
We addressed the intricate supply chain challenges by leveraging Snowflake’s advanced data platform. Here’s a closer look at how we harmonized supply chain functional concepts with Snowflake's features to create a tailored solution.
Fig 2. Technical architecture of the implemented solution
Snowflake data warehouse for a single source of truth
Like the supply chain network's central inventory hub, Snowflake's data warehouse efficiently models and stores data from diverse sources such as Enterprise Resource Planning (ERP) systems, shipping lines, logistics partners, and internal systems.
This centralization offered the client a single source of truth, ensuring data accessibility and consistency across the entire group. It helped them establish real-time visibility on the inventory levels and enabled better decision-making.
Snowflake Snowpark for agile supply chain operations
Snowflake's native development environment allowed us to write and execute code directly within the platform. With Snowpark and Python, we performed advanced data transformations and processed tasks seamlessly within Snowflake.
This improved data processing efficiency and made their supply chain operations more agile. It empowered the customer to quickly adapt to the changing market conditions and evolving supply chain dynamics.
Snowflake Snowpipe for real-time responsiveness in the Supply Chain
Snowflake's Snowpipe provides a real-time tracking system in a supply chain that is pivotal in ensuring supply chain data is available in near real-time. We utilized Snowpipe for both batch and near real-time data ingestion and processing.
This meant that data from various internal systems and external sources, such as shipping lines APIs, was constantly and automatically fed into the Snowflake platform. It mirrored the continuous tracking of shipments and inventory levels in a supply chain.
This real-time data integration enabled the customer to respond swiftly to supply chain disruptions, demand fluctuations, and critical events that required immediate attention.
Advanced analytics for informed decision-making
Snowflake's support for SQL queries and seamless integration with business intelligence tools like Microsoft Power BI enabled us to conduct an in-depth analysis of historical supply chain data to uncover patterns.
The integration with Power BI facilitated the development of various analytical tools, such as a Demand and Supply Planning engine, Track and Trace system, Procurement Benchmark Reports, and simulators for Replacement Cost and Purchase Cost. These tools helped leverage data-driven insights to fine-tune supply chain operations for maximum efficiency.
From data warehousing and real-time data ingestion to advanced analytics and the development of specialized tools, Snowflake played a pivotal role in enhancing visibility, efficiency, and agility within the supply chain operations of our group-level industrial customer.
Our collaborative effort with the client, empowered by Snowflake's advanced capabilities, yielded tangible results transforming their supply chain management.
- A 20% reduction in supply chain disruptions through Enhanced Group-Wide Visibility: The near real-time visibility into the different supply chain stages, like planning and sales, allowed precise monitoring and tracking. The increased visibility helped the client identify and address potential bottlenecks, reducing the supply chain disruptions by 20%.
- A 15% increase in demand forecasting precision: The client witnessed a 15% increase in demand forecasting precision due to the enhanced forecasting ability, further improving inventory management. They also achieved a 12% reduction in excess inventory, reducing inventory costs.
- A five percent increase in overall revenue: Simultaneously, there was a 10% reduction in stockouts, ensuring a consistent flow of products to meet customer demand. These improvements in inventory management contributed to a 5% increase in overall revenue.
- Optimized Group Inventory: The centralized platform facilitated data-driven insights, enabling the customer to optimize group-level inventory resulting in a 15% reduction in carrying costs associated with excess inventory.
- The stockout risk was reduced by 8% with streamlined production and delivery processes. The reduction in carrying costs and the mitigation of stockouts directly and positively impacted the company's bottom line.
- Enhanced Supplier Collaboration: The centralized platform was pivotal in strengthening collaboration with suppliers, leading to a remarkable 25% enhancement in on-time deliveries from suppliers.
- Improved supplier satisfaction: This collaborative approach improved supply chain efficiency and fostered stronger and more strategic supplier relationships. As a result, procurement costs came down by 10%, and overall supplier satisfaction increased significantly.
- Cost Efficiency Across the Group: The centralized platform offered valuable insights through distribution and availability dashboards, enabling the customer to make informed decisions, resulting in a 7% reduction in operational costs.
Tools like replacement cost simulators and procurement benchmark reports allowed customers to optimize costs effectively. These cost savings helped the customer remain competitive and allocate resources to strategic initiatives.
These results encompass a substantial reduction in supply chain disruptions, increased revenue, lower carrying costs, reduced stockouts, improved supplier collaboration, and significant cost savings.
The supply chain evolved from being a hindrance to becoming a strategic asset, contributing to cost reductions, increased customer satisfaction, and a more competitive position within the industry.
The way forward
The intricate and ever-evolving landscape of Supply Chain Management (SCM) presents formidable challenges for industrial enterprises that encompass complexities. Thriving in this dynamic environment necessitates more than traditional solutions; it demands innovation, agility, and a strategic approach to tackle these multifaceted challenges head-on.
Industrial enterprises need tools that adapt to these challenges and transform their supply chain operations into a source of competitive advantage. Snowflake Data Cloud equips industrial enterprises with the tools required to survive and thrive amidst these challenges, enhancing visibility, agility, and efficiency across their supply chains and ultimately securing their place as leaders in the industry.