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NTT DATA and SAP Asia Pacific and Japan (APJ) have announced a new co-innovation solution to improve supply chain insurance management. The solution, Connected Product, is a packaged offering jointly developed by global digital business and IT services leader, NTT DATA, and SAP SE, furthering the strategic alliance formed in 2020 between parent company NTT and SAP SE.

Global value chains are becoming increasingly complex due to rising geopolitical risk, trade growth and volatility of material availability. Losses due to poor transportation conditions have become a multibillion-dollar problem due to extreme difficulty in identifying the cause of damage or when an incident occurs.

These challenges offer a great opportunity to overhaul the overall value chain with a solution that can provide real-time information on transport operations—from changes in temperature and humidity to whether the goods have been tilted—to all parties involved, giving everyone the ability to quickly adapt to potential incidents and rapidly recover from them.

The Connected Product solution responds to this need by monitoring the location and environmental conditions of goods in transit. It is especially useful for tracking fragile goods, such as solar panels; bulk liquids, like wine and olive oil; and sensitive cold chain shipments, such as cheese, pharmaceuticals, and even vaccines. The tracking provides greater visibility across the entire supply chain, and agility to activate immediate reactionary procedures, in case of damage or delays. This reduces friction when purchasing insurance and processing claims for shipments and ensures timely delivery of goods. It also reduces waste and promotes sustainability.

Connected Product brings together the power of SAP^® Business Network for Logistics and the global track and trace option, extended with NTT DATA smart insurance policy management assets to dramatically change the way people ship goods and manage associated risks. The solution also includes components built using SAP^® Business Technology Platform. By enabling end-to-end, real-time monitoring of the transportation conditions, the solution can monitor all variables that could affect a shipment, and automatically trigger and execute insurance policies if goods are not transported under certain pre-defined conditions.

Utilising SAP Business Network for Logistics helps improve accountability for each stakeholder and makes transport insurance management easier. Plus, by digitising shipment and insurance documentation, the solution simplifies tracking and insurance processes across the supply chain, reducing waste and costs and benefiting the whole ecosystem, from the insurance company to the insurance reseller to the logistics companies.

“Global disruptions have caused today’s value chains to be more complex and diversified than ever before, and this complexity will only increase. This solution improves supply chain visibility for logistics companies and insurers here in the APJ region and delivers on NTT and SAP’s shared vision of helping companies around the globe achieve greater resiliency and agility to ensure they are prepared for future disruptions,” said Paul Marriott, President at SAP APJ.

“Today, more than ever before, global logistics need to be resilient and adaptative. Long-term planning alone is no longer sufficient, and organisations must be able to react quickly especially in times of uncertainty. Critical to enabling this type of agility is to have the right data in the right hands, in real time,” said Norbert Rotter, SVP at NTT DATA Corporation and CEO at NTT DATA Business Solutions.

Currently, NTT DATA and SAP Connected Product teams in Japan, Germany and Spain are collaborating on a pilot with a Spanish logistics group and a German insurance company, using Connected Product to track the condition of hundreds of containers moved by 20 shippers between Europe and Asia.

The data gathered by IoT sensors helps to ensure that conditions critical for the goods, like temperature, luminosity or shock-proofing requirements, are managed during the journey. That information gives customers the opportunity to quickly react to incidents. The pilot project will continue to run through September 2022, after which NTT DATA plans to incorporate the system into business operations, extending the solution to more international insurance and logistics companies.

For more information on Connected Product, please watch the video featuring Christian Klein, CEO and Member of the Executive Board at SAP SE, and Jun Sawada, CEO at NTT (at the time of filming).

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