Investment in The Coconut Industry by Nancy Cheruiyot
Creating a Digital Supply Chain: Monsanto's Journey
1. Creating a Digital Supply Chain:
Monsanto’s Journey
Jim Kinnett
October 2015
2. Monsanto:
A Sustainable Agriculture
Company
• Bringing a broad range of solutions
to help nourish our growing world
• Collaborating
to help tackle some of the world’s
biggest challenges
• >20,000 employees in 67 countries
• >50% employees based outside of
the United States
• Provider of seeds, traits and treatments on hundreds of
millions of acres globally, serving farmers large and small
• ~$15.8B Revenue and ~$8.5B gross profit
(reported for fiscal 2014)
• One of the 25 World’s Best Multinational Workplaces by
Great Place to Work Institute
3. A History of Innovation
DRooted in Chemistry
Technology
Transformed by Breeding &
Genomics
Positioned for Digital
Agriculture
Dr. William Knowles shared the
Nobel prize in Chemistry in
2001 (with Ryoji Noyori) for his
work at Monsanto on
asymmetric hydrogenation
reactions.
+ +
Before 1996 1997-Today Future
4. Information-based digital farming:
• Seeds
• Weather and Water
• Soil and fertilizer
• Operation costAverageCornYield
CornYieldPotential
~150
Average
Bu/Acre
~300
Average
Bu/Acre
Produce More, Conserve More:
On 1 Billion Acres
5. Beginners Conservatives
Fashionistas Digital Masters
Leadership Capability
DigitalCapability
Adapted from “The Digital Advantage: How Digital Leaders Outperform Their Peers in Every Industry” by George Westerman et al. Nov 2012
•Revenue: +6%
•Profit: -11%
•Revenue: +4%
•Profit: -24%
•Revenue: -10%
•Profit: +9%
•Revenue: +9%
•Profit: +26%
•Wait & See
•Ask for certainty
•Privacy as excuse
•Regulation as excuse
Technology leader
Focus on speed
•Lack governance
•Lack integration
Strong coordination
Focus on efficiency
•Governance trap
•Lack of org mobilization
Driven by senior leaders
Results to inspire
Govern towards outcome
Integration with flexibility
Learn from Digital Masters
Technology Savvy with Operational Discipline
5
6. 6
R&D Pipeline Supply Chain Commercial Outreach
Genomics & Molecular Breeding
Field Capabilities
Pipeline Logistics
Customer Care
(Order-to-Cash)
Integrated Planning
Advanced Production
Customer (NPS)
Go To Market
Information Service & Products
Partners
Consumers
Stakeholders
Hundreds of internal decisions, many relevant to the farmer’s decisions
Digitizing Our Business:
To Better Serve Our Customers
Acquire Collaborate Invent
Sensors on combine to
collect real-time, in-field
data
Sensors on truck for real-time
data from field to factory
7. Digitization from Lab to Customers
Superior Product, Superior Customer Experiences
Pipeline
•Billions of data points
•Millions of testing plots
Supply Chain
•199 locations
•47 countries
Commercial
•Millions of customers
•>60 countries
Seed Identify and Genomics
7
Perfect Customer Order: Real
Time Feedback
Real Time Harvest
Progress & Yield
Data
Real Time
Temperature &
Moisture During
Transportation
Digital Supply Chain: Real Time Decision
8. 8
Expand Our Agriculture Leadership:
Secure for Business, Open to All Collaborators
A Cloud-Based Digital Infrastructure Expand Product Leadership
Serve All Customers
• Bimodal IT: Systems of Engagements & Systems of Records
• IoT & data streaming
• Pervasive analytics
• Scalability & agility: Microservice, SOA & DevOp
• Seamless authentication
• Open and secure collaboration: APIs
9. Digital Supply Chain
9
•COGs Savings Driven by Operational Efficiencies
• Customer Experience Step Change Leading to Improved NPS
• Supply Chain End-to-End Modernization Unlocking Real-Time Decisions
PLAN
(Planning)
SOURCE
(Procurement)
MAKE
(Production)
DELIVER
(Customer Care)
Technology,
Breedingand
Chemistry
Supply Chain Operations:
Global Coordination and Local Execution
Customers
Demand &
Supply Mgmt
Supply Chain Analytics
Procurement
Mgmt
Field & Plant
Optimization
Transportation &
Customer Service
10. Monsanto Company Confidential – Internal Only |
2015 Top Supply Chains Differentiate Themselves
10
35. Monsanto
1. Amazon®
“Bimodal Strategies”
“Customer Intimacy”
“Digital Business Models”
2. McDonald’s®
3. Unilever®
4. Intel®
5. Inditex®
-
-
-
-
-
* Gartner 2015 Top 25 Supply Chain Rankings
Monsanto moved up from
100+ in anticipation of
transformation
11. Monsanto Company Confidential – Internal Only |
Transforming Our Supply Chain to Delight Our Customers
11
Customer Indifference
(Economic gain only)
Customer Satisfaction
(Economic gain + responsive service)
Customer Delight
(Economic gain + inventive service)
Seed Production, Network Design,
Transportation Management
Planning
Customer Care – “Ease of Doing
Business”
Customer Service Perfect Order
Loyalty/Stickiness
Supply/Demand Accuracy Substitution Reduction
“If I asked people want they wanted, they would have said faster horses.”
-- Henry Ford
ReliabilityEfficiency
Internal Value
External Value
12. 12
Digital Supply Chain is an intelligent,
value driven network (Digital Supply Network -
DSN) that leverages new approaches with
technology and analytics to create new forms
of revenue and business value.
13. Digital Supply Chain
Lighting up our digital supply network
& unlocking the digitized information
• Rich sensors capture data
• In-season optimizations
• Yield prediction
• Global lab integration
• Improved test methods
• Rich shop floor
integration
• Smart equipment
• Network utilization
• Truck optimization
• Quick-ship
• Inventory visibility
• Fleet monitoring
• Delivery validation
• Customer360
• Improved Perfect Order &
Net Promoter
Data
Aggregators
Digital
Capabilities
Data
Foundation
Analytics
Transactions Warehouse Appliance
Imagery Social Geospatial
IoT Sensor
Collector
API
Gateway
Data
Historian
Dashboard Optimization Machine Learning
14. Digital Supply Chain
Lighting up our digital supply network
& unlocking the digitized information
• Rich sensors capture data
• In-season optimizations
• Yield prediction
• Improved test methods
• Rich shop floor
integration
• Smart equipment
• Network utilization
• Truck optimization
• Quick-ship
• Inventory visibility
• Fleet monitoring
• Delivery validation
• Customer360
• Improved Net Promoter
Data
Aggregators
Digital
Capabilities
Data
Foundation
Analytics
Transactions Warehouse Appliance
Imagery Social Geospatial
IoT Sensor
Collector
API
Gateway
Data
Historian
Dashboard Optimization Machine Learning
Measure of Success
• # of metrics / KPIs exposed
• # of decisions automated
Measure of Success
• % of enterprise supply chain
information accessible &
reused
• # of data sources retired –
regional databases & local
files
Measure of
Success
• # of IOT
sensors
connected
• # of
business
capabilities
exposed by
APIs
• # of
facilities
connected
into the
enterprise
data
footprint
Measure of Success
• Reduced COGs through digital
platforms that infuse analytics &
data to optimize the business
• Improved customer experiences
through digital markets
• Improve speed to value through
the adoption of disruptive
technology – decision accuracy,
perfect order, E2E visibility, etc.
15. Digitization: Convergence of Transformations
15
Supply Chain
IT
CONVERGENCE
• Business harmonization
• COGs / inventory efficiency
• Customer engagement
• Decrease injury severity
• People / talent
• Agile mind-set
• Customer centric
• Analytics infusion
• Advanced technologies
• People / talentDigital SC Platform that:
• Creates insights
• Shapes outcomes
• Leverages new technology
• Unlocks new business opportunities
We would like to share with you three examples of how digitization are linked to better products and better customer experience:
Example 1: Partnering with breeding to digitize the workflows and bring decision science to all aspects of breeding operation
Molecular breeding and genomicsiss one of our competitive advantage, the big data technologies enables us to make advancement decisions based on markers that are located across the genome (genome wide selection). Genome wide marker analysis used to take days, now it can be done in minutes.
By syncing up the innovation between R&D and IT, we formed a project code named “Breeding 3.0”. We are excited about the opportunity to improve the pace of genetic gains by 30-40% while provide fully traited products to farmers without delaying product launch.
The project has an estimated total NPV over $2B and IT is an integral part of this strategic initiative.
Example 2: We are part of supply chain transformation. The example here is about real time decision for field harvest and transportation: a). FieldDrive: An in-house invention to stream harvest progress and yield data back to analytics team real time; b). Cargo View: Off the shelf device adapted for realtime monitoring of temp and moisture to ensure seed quality
Example 3: We developed capabilities to monitor our deliveries in real time so our customers know when the order will come and can provide real time feedback at the point of delivery
We wanted to start our transformation update by looking externally first.
For the last 11 years, Gartner has ranked the top Supply Chains.
Monsanto has been in the 100’s, but in 2015, we showed up as #35 primarily in anticipation of our Supply Chain Transformation.
The top companies, as you can see here, differentiate themselves in 3 areas:
1. Bimodal Strategies – Meaning that top companies not only leverage supply chains for tradition cost efficiency opportunity, but see supply chains as an enabler of revenue.
2. Customer intimacy – Top companies go beyond improving the sales experience, but they anticipate the sensibilites of their customers. They deliver service to them before they even ask.
3. Digital Business Models – Finally, top companies use extensive digital platforms to engage with their customers.
Our transformation is in fact focused in these areas as well.
Following the customer intimacy comment made on the previous slides, we wanted to review our areas of focus against this expectation.
Our vision for transformation begins with internal efficiencies but reaches out to ultimately delight our customers.
You can see on the left the areas where we are focused. Some of these areas are in fact about efficiency, accuracy, and reliability. But the work we want to do in customer care goes past simply internally efficiencies and satisfying our customer, we are focused on delighting our customers. Providing them a level of service that they may not know they want until they get it. The quote at the bottom is a good one to illustrate why we want to focus not just on satisfaction but delight.
Take a minute…
We started our research & dialog around this topic by asking ourselves - prior to doing any readings / dialog / etc. - what is a digital supply chain ? And to quicken our path to a dialog three choices were offered:
Enterprise Supply Chain solutions are in place
End-to-end visibility of supply chain information
Event driven insights that shape outcomes
In the end… We adopted all three but not directly. We honed in on #3 as the competitive advantage that would enable #2 and require #1
What do you think ?
Vision: Unlocking digital yield > Unlocking digital "supply chain”
Strategy: Pivot our traditional supply chain as a digital supply network, a network of networks, through analytics and technology that shape positive outcomes
Focus areas:
Adopting digital platform capability & operating model
Maximize existing investments across IT to unlock new capabilities
Accelerating time to value by plugging in innovative solutions into our digital foundation
Drive unification / rationalization of process and information nomenclature