Transforming a Telecom Supply Chain Into a Ready-for-Anything Digital Powerhouse

How progressive digital approaches are helping telcos resolve five of their biggest supply chain headaches

This Industry Viewpoint was authored by SAP’s Gary Pan

For telecom companies, managing multiple supply chains can be a massive struggle and a drag on the business, especially when you’re relying on disconnected systems, disparate data, manual processes, and murky planning practices. That’s why more telcos have been focused on overhauling their supply chain management systems and practices in recent years, turning glaring weakness into a strategic strength.

In the case of one major global telecom company, it has adopted an integrated supply chain planning platform for its consumer mobile phones and accessories business, one that unites previously fragmented processes, uses artificial intelligence (AI) and machine learning (ML) to support decision-making and mitigate disruptions, and provides a single source of data truth for the company. The result: millions of dollars in capital spend saved, according to the company, without compromising customer service or partner relationships.

Meanwhile, another telecom company has similarly integrated three of its supply chains under a single management system. The move is projected to generate $50 million in IT platform benefits by 2026, plus $9 million in recurring annual benefits.

Benefits like this are within reach for organizations that are open to embracing holistic digital approaches. Here, based on my work supporting telecom companies in their digital journeys, are five areas of supply chain management where telcos tend to be especially challenged, with suggested steps for addressing them:

Challenge 1: Complexity across multiple supply chain models crushes efficiency. Many telecom companies have not one but multiple supply chains to manage — for engineering equipment associated with the network and data centers, for commercial devices like handsets and CPE (customer premises equipment), each with its own unique management model, team and tools. The result is similar to what one of the aforementioned telecom companies said it faced: “Business teams had to grapple with decentralized data sources to gain a complete picture of available inventory, spending more time on handling data. They also lacked the right tools for simulation and scenario planning, leaving decision-making up to individual planners, who each possessed different knowledge, skills and experience.”

The Fix: Consolidate and standardize the tools, resources and skillsets needed to run different supply chain models, while accommodating the unique requirements of each model. As Telstra has discovered, consolidating supply chain activities within an enterprise-grade supply chain planning platform brings order to the chaos, with standardized data models, business language, user experiences, etc., to bring consistency to systems, processes and practices, from planning to execution. Let’s say engineering equipment and commercial devices now share the same order-promising function to fulfill orders from large network rollout projects as well as orders from consumer or distribution channels. That single function should be able to handle the distinct allocation logics associated with different models.

Challenge 2: End-to-end processes are mostly siloed and disconnected. For many telecom companies, this is perhaps the most obvious supply chain deficiency. Inventory management could be disconnected with planning, procurement, merchandise and fulfillment due to system segregation and data discrepancies, for example, resulting in low inventory utilization, increased pressure on working capital and low customer satisfaction.

The Fix: Instead of piecemeal efforts to reinvent certain aspects of supply chain management, what’s likely needed here is a holistic supply chain transformation plan that encompasses the entire planning and execution systems. This gives supply chain decision-makers a single source of truth and end-to-end visibility, which in turn makes planning and forecasting more on-point, and makes it easier to adjust on the fly as market conditions and supply chain dynamics change. Really what we’re talking about is establishing a supply chain “control tower” for all things supply chain-related, one that offers a 360° view across planning and execution, that alerts decision-makers to urgent issues in real-time and, with business AI capabilities as part of the system, provides suggestions for next best actions.

Challenge 3: Volatility and disruptions are exceedingly difficult to overcome. The global telecom supply chain is a fickle beast, prone to disruptions, widely varying lead times and other factors that complicate short- and long-term planning for both engineering equipment and commercial devices. With the rapid growth of fiber-to-the-home business, for example, how can telcos synchronize CPE device demand and inventory with the network rollout plan, which itself could be highly volatile due to disruptions in the network equipment supply chain?

The Fix: Here’s where machine learning- and AI-driven predictive capabilities can elevate the accuracy of supply chain planning, both from a long-term strategic perspective and a short-term execution perspective, including demand forecasting as well as inventory optimization, allocation and replenishment across multiple levels from vendors, distribution centers to retail stores and dealers. For one of the aforementioned companies, intelligent simulation tools have “dramatically altered” scenario planning, giving planners real-time insight into the interrelationships between demand, supply and inventory to inform their decisions. As a result, the company reports that the forecast accuracy for mobile phones has improved by double digits, with lower inventory levels and more optimal buying and replenishment at retail stores.

Challenge 4: Stakeholder activity is a big blind spot. Tracking equipment on its journey to third-party logistics providers, vendors, distributors, subcontractors and other stakeholders is no easy task. That task grows more complicated when a telecom company and those stakeholders can’t share real-time information about the journey. What’s the real-time inventory level at a warehouse managed by a third-party logistics provider? Where’s the auditable and verifiable emission data required from internal and external sources in order to calculate and report on the carbon footprint associated with products and material flows? A lack of connectivity and data flow among stakeholders can make it difficult to answer questions like these.

The Fix: Develop a digitally connected stakeholder ecosystem supported by a platform that enables timely, standardized, and mostly automated information exchange and process collaboration with all internal and external stakeholders. We’re seeing it in a wide range of industries, from automotive to industrial manufacturing to aerospace: companies along the value chain creating connected business networks and ecosystems to standardize and securely share trusted data because it’s in their best business interests to do so. These kinds of networks can facilitate process collaboration across the source-to-pay and plan-to-fulfill processes, real-time exchange of inventory data, cooperative issue resolution, exchange of ESG information and much more.

Challenge 5: Visibility down to the device level is lacking. Disjointed legacy systems hamper telcos’ visibility into the entire lifecycle of a device or piece of equipment. In a legacy environment, telcos need the ability to query through multiple systems to get a full lifecycle view of a piece of equipment, which could take days or even weeks to accomplish. This creates challenges in inventory utilization, customer service and the ability to develop new business models.

The Fix: Implement full lifecycle-management capabilities for engineering equipment and network asset, along with commercial devices. The goal: gain an end-to-end view of serialized equipment and devices, with a single source of truth for all lifecycle events, including forward logistics and reverse logistics. We’re already seeing leaders in the telco space employ these types of capabilities to transform the business models they use to provide devices to customers, via a lease or a device-as-a-service model for example.

Not only can supply chain modernization steps like these open the door to new opportunities, they can elevate the customer experience and give telecom companies the supply resilience and reliability they must have to thrive in a disruption-prone world.

Gary Pan is an industry director in SAP’s telecommunications business unit and is responsible for SAP’s go-to-market strategy for the global telecommunications industry. He has more than two decades of experience in the industry and has spent the last 14 years with SAP, guiding customers through their digital transformation projects from his base in Shanghai.

Attributions:

An integrated supply chain planning platform

Uniting three supply chains into one

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Categories: Artificial Intelligence · Industry Viewpoint · Software