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According to a survey by the Association of German Chambers of Industry and Commerce (DIHK), 83 percent of companies in Germany are complaining about supply problems and price increases for raw materials and intermediate products. Many companies have already scaled back their production or even stopped it altogether, and the hoped-for economic upturn after Corona appears to have been put on hold.

The problem of faltering supply chains, missing materials and rising purchase prices will continue to occupy the global economy for some time to come. Companies should therefore act quickly and adapt their strategic and operational procurement processes to the more stringent requirements. As a short-term measure, it is advisable to set up a strategic task force comprising representatives from purchasing, IT, logistics, supply chain and the legal department. Efforts should focus on building an integrated system landscape consisting of SAP Ariba, the Ariba Network and innovative third-party tools. These tools offer companies several effective approaches to counter the threat of supply risks and thus remain profitable and competitive.

Transparency is everything. This is especially true for companies that purchase a wide range of materials or services from different suppliers. If certain supply bottlenecks or price increases become apparent, it is helpful to quickly and specifically identify the relevant suppliers and supply agreements. 

With Ariba's supplier and contract management, the information you need is available in a timely manner. In addition, because Ariba is seamlessly integrated with enterprise-wide SAP ECC and supply chain planning applications, the impact of anticipated replenishment issues on the supply chain can be analyzed at the touch of a button. This enables a purchasing company to quickly initiate effective countermeasures.

Hedge quantities and prices

One of these is to proactively approach the suppliers concerned with the aim of securing the agreed delivery quantities and delivery prices. The supplier and contract data stored in Ariba provides the basis for targeted negotiations to adapt existing agreements or jointly search for new solutions. By connecting suppliers digitally, both sides can communicate with each other without media discontinuity. 

For the remaining supply problems, it is advisable for companies to allocate the available raw materials and intermediate products to selected production units of their own. Who is awarded the contract in each case should be based purely on business criteria, such as existing customer contracts or the margins to be achieved.

To counter the growing volatility in the purchasing market in general, the establishment of alternative sources of supply is a good idea. Ariba users are also well positioned for this. As part of the new SAP Business Network, Ariba provides companies with a unified B2B portal. They can use it to find new partners among millions of global suppliers, network with them seamlessly and process orders quickly and easily.  

Those who want to search specifically for suitable suppliers should extend their SAP procurement platform with special third-party tools. For example, AI-based software solutions are offered on the market that search through millions of supplier profiles available on the web and billions of data records. This not only supports the search for suitable suppliers, but also checks their trustworthiness. Companies receive well-founded market information in order to be able to purchase more strategically. 

Purchasing organizations can find other useful SAP add-ons within the
SAP.iO Innovation Program. With this fund, SAP supports internal and external startups worldwide in developing products and services that expand and diversify the SAP ecosystem. One example is the Archlet bidding tool, which can be used to obtain and validate bids from suppliers and negotiate prices. 

IT Integration

The use of an SAP-based procurement platform provides purchasing organizations with the agility they need to address the supply crisis, but it comes with a number of challenges. For example, IT departments face the mammoth task of integrating the new tools into the existing IT system landscapes, SAP purchasing processes and solutions. In addition, the innovations must be established and sustainably supported in the company with a change management approach.

Buyers, on the other hand, are spoilt for choice when it comes to identifying precisely those innovative solutions and add-ons in the Ariba environment that are suitable for their company. In order for companies to master these extremely complex tasks, they should engage an experienced SAP and Ariba consulting partner. This is because only specialists are able to filter out precisely those tools from the wealth of new ideas that support a company's individual purchasing requirements.

Likewise, the consulting partner can ensure seamless integration of the new solutions into the Ariba platform, making application and operation noticeably easier. Users have an SAP-based purchasing solution "from a single source" instead of having to switch between individual programs in a time-consuming process. In addition, they have access to high-performance technical support in day-to-day IT operations to help them with questions, problems and incidents.

In addition to a short-term task force, the link between procurement and IT in the organization should be ensured in the long term, in the form of a procurement excellence team. This idea is not new, but in the supply crisis it is more topical than ever in order to derive the right measures and make purchasing processes more robust in the long term.

The Procurement Excellence Team should bundle purchasing and IT competencies. Its central task is to constantly review the integrated system landscape consisting of Ariba and the selected special solutions for optimization opportunities for strategic and operational procurement processes. Therefore, team members should be curious by nature and open-minded towards technical innovations. After all, only through constant further development can the Ariba platform unleash its full potential, which lies in a congruence of the real business world and internal purchasing processes.

Digitization as a permanent task

Since purchasing plays a key role in business success, its digitization should be understood as an ongoing task. In concrete terms, this means that even if the current replenishment problems may lead to a shift in priorities, purchasing organizations should not continue to postpone this issue. Those responsible are thus well advised to learn the right lessons from the current "stress tests" and to drive forward the digital transformation of procurement processes in suitable initiatives.

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