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Digital Supply Chain Management - Supply Chain 4.0 - Supply Chain Management in Industry 4.0

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Digital Supply Chain Management - Supply Chain 4.0 - Supply Chain Management in Industry 4.0

How to increase operational efficiency leveraging digital technologies in Supply Chain Management

https://digitalstrategy-ai.com/

Digital Supply Chain Management - Supply Chain 4.0 - Supply Chain Management in Industry 4.0

How to increase operational efficiency leveraging digital technologies in Supply Chain Management

https://digitalstrategy-ai.com/

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Digital Supply Chain Management - Supply Chain 4.0 - Supply Chain Management in Industry 4.0

  1. 1. Supply Chain 4.0 An introduction to the key implications of digital technologies in Supply Chain Management Danar Mustafa Driving digital transformation in Operations and Supply Chain Management
  2. 2. Short recap and summary of Industry 4.0 Full presentation, click here Or Go to Digital Supply Chain Management Here
  3. 3. Key Definitions Digit: From the latin word for “finger”, referred to counting on fingers Digital: Information & Communication Technologies, represent information digitally, i.e. 0 and 1, rather than analogue Digitization: The process that converts analogously represented information into digitally represented Digital Transformation: The processes that change current organizations & their operations from predominately not utilizing digital technologies into doing so Digital Business: Situations when a business utilizes digital technology so as to activate economic value creation and appropriation Industry 4.0: Is referring to trend towards automation and data exchange in manufacturing processes. Also known as Industrial Internet or SMART manufacturing.
  4. 4. Industrial Revolutions • The first industrial revolution (-1765) – Agriculture processes are replaced with industrial mechanization – Invention of steam engine • The second industrial revolution (-1870) – New sources of energy: electricity and oil – Combustion engine – Telegraph – New organization and productions models by Taylor and Ford • The Third Industrial revolution (-1969) – Rise of electronics  transistor and microprocessor – High-level automation  PLC and robots • The Fourth Industrial revolution – Internet and virtual world (cyber physical systems) – Cloud – Big Data Analytics – Internet of Things
  5. 5. Industry 4 across the globe Germany • Industrie 4.0 Sweden • Smart Industry United States • Smart Manufacturing Leadership Japan • Industrial Value Chain Initiative China • Made in China 2025 https://ec.europa.eu/digital-single-market/en/coordination-european- national-regional-initiatives
  6. 6. Driving Technologies • Internet of Things – Sensors connecting devices • Mobile Solutions – Tablets, wearable sensors, smart glasses • Cloud Computing • Cyber-physical system – Monitor and control physical assets • Big data analytics – Turning data into insights • Manufacturing technologies – Robotics and 3D printing • Distributed ledgers – Blockchain https://www.gartner.com/smarterwithgartner/5-trends-emerge-in-gartner-hype-cycle- for-emerging-technologies-2018/
  7. 7. Cost of sensors, bandwidth and processing power • Moore’s Law – The number of transistors that fit on a chip grows exponentially. Processor Power doubles every 18 months – Processing costs have declined almost 60 times in the last 10 years – Sensor prices have dropped to an average of 60 cents • Butters Law – Communication speed doubles every 9 months – Bandwidth cost has decreased by a factor of nearly 40 times • Kryder’s Law – Storage capacity doubles every 13 months
  8. 8. Physical  Digital  Physical • Monitor, control, optimize and automate – Data is the new oil , from analog to digital – New products and service offering • Sensors, wearable's, Mixed reality – Move from physical to the digital world • Autonomous robotics and simulations – Interact with the digital world – Digital Twins
  9. 9. Predicted Benefits of Digitalization and Industry 4.0 • Weforum estimates $100 trillion of value that digitalization could be generated over the next decade • Unlock value through Digital Transformation – Digital transformation could unlock $1.3 trillion of value for the electricity sector – if it embraces digitalization • BCG Quantitative Analysis of Manufacturing in Germany – Productivity: Vary by industry. Automotive companies can expect 10- 20 percent increase – Revenue: Additional growth of about 30 billion USD / year – Employment: 6 percent increase during the next ten years • Studies point that the fourth industrial revolution can create up to 3.7 trillion in value by 2025 Reduced C02 Emissions Lives Saved by increased security Cost Savings Time Savings Net Job Creation Accidents and Injury avoidance
  10. 10. Three Effects to Consider • Mass Customization – Individual requirements – Flexible production – New pricing models • Automation – Smart and connected robots in production – Process Automation – Intelligent Applications • Big Data – Improved decision-making – Faster problem-solving – New types of innovation
  11. 11. Digital Supply Chain Management
  12. 12. What is Supply Chain Management? • "Supply Chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer" - Martin Christopher (2013) – Physical flow: movement, and storage of materials and goods – Information Flow: Coordinate and control day-to-day flow and long-term plans • Logistics Management is referring to day-to- day activities of managing, acquiring, storing and transporting resources • Supply Chain Management acknowledges all activities such as marketing, new product development, finance and customer services supplychaininformation.blogspot.com
  13. 13. Why focus on improving Supply Chain Management? • Income Statement – Response time to customer request – Product Quality – Time to market for new products – Transportation Cost – Selling Cost – Inventory Cost – Forecast accuracy • Working Capital – Holding Cost – Correct invoicing – Payment on time • Conclusion: – Supply Chain decisions impact financial performance
  14. 14. Supply Chain Inefficiencies • Studies shows: – Today, up to 30% of the vessel’s voyage time can be spent in port – In UK about 3 hours per shipment is wasted on requesting and funneling data from suppliers and partners – More than 100 million of hours/year are wasted in procurement and freight administration – Trading with non-customs union partner incur 17% more wasted time in administration – Supply chain inefficiencies (ordering, inventory, patient flow etc.) leave $23B in potential savings on the table for hospitals • … At the same time, pressure to make supply chains more – Faster – More flexible – More customized – More accurate – More efficient • And at the same time – Sharing Economy – E-Commerce – Technology Development – Trade Wars – Demographic Changes – Environmental Drivers
  15. 15. Supply Chain Digitalization BlockChain • Smart Contracts Autonomous Transportation • Self-driving autonomous trucks Data Analytics • Fleet and performance analysis Internet of Things • Remote Asset diagnostics Drone Technology • Inventory and capacity management Robotics Systems • Material handling Augmented Reality • Cargo inspection Cloud Digital Platform • Dynamic asset pricing 3D Printing • Hub for part manufacturing
  16. 16. Data and Analytics as the core • Operations Efficiency – Create optimal inventory level and reduce buffer inventory • With Internet of Things solutions data can flow in real-time from suppliers, partners and customers – Optimize Transportation Planning • Machine Learning Techniques to predict patterns from historical data on weather and traffic planning – Improving end-to-end visibility of material flow planning • Data from RFID, GPS, Sensors – Control Tower • All types of data can be translated into optimizing decision making based on real-time data • Customer Experience – Optimize last mile deliveries – Fleet management – Customization • New types of Business Model and strategies – Real-time data intelligence – Platforms and new types of network
  17. 17. Case Study: Alibaba Transportation Planning • Vehicle-cargo matching • Route planning • Delivery optimization • Key topics: – Internal and external data can be used on effective ways – Algorithms deliver new type of insights How to Leverage Big Data to Deliver Smart Logistics video
  18. 18. Blockchain • Enablers: – Data interoperability – Secure transactions – Reduce process times • Smart Contracts • Automated pricing and payments • Tracking and traceability • Case study – IBM and Maersk video
  19. 19. Case Study: IBM and Maersk Blockchain • Exchange events data and handle document workflows • Enabling end users to securely submit, stamp and approve documents • Key points: – New types of products and services – Potential savings from more efficient process • IBM and Maersk video
  20. 20. Internet of Things • IoT – Track and trace assets – Inventory Management – Fleet management • Coordinate and plan – Delivery • Alerts and navigation • Autonomous operations • Case Study Video – Traxens Smart Container – Siemens RFID
  21. 21. Augmented & Mixed Reality • Optimize Logistics Operations – Object recognition – Picking – Sorting – Goods inspections • Case Study Video – DHL Vision Picking
  22. 22. 3D Printing • Decentralize production – Customize production – Reduce transportation cost – On-demand – Need for warehouse? • Case Study Video – BMW
  23. 23. Robotics • Warehouse efficiency – Collaborative robots – Scalable – Flexible • Case Study Video – OCADO – Kiva Warehousing
  24. 24. The Idea of Control Tower • One integrated system solution • Transparency of material and information flow • Improve visibility • Better planning and monitoring • How to start? – Collect data – Basic reporting and analytics – Proactive monitoring • Read: What is a Control Tower
  25. 25. Other initiatives • Drones and Automation – Air Drone Delivery – Electrical Cargo Bike – Drone Inventory – Robot Process Automation – Self-driving trucks • Benefits – Flexible – Accuracy – Speed – New type of services
  26. 26. Security, privacy and integrity • Everything will be connected – Who owns the data? – What happens with our data? – Are the devices protected and secure? • AI systems and Algorithms – Fairness – Accountability – The Black Box • Complex Data Ecosystems – Data are brokered on global markets
  27. 27. Case study – Business Models • Klöckner & Co, GE, Baxter, Electrolux, Valmet, Google Nest, Tesla, – From transactional selling parts/repair to optimized assets – Co-creation – Ecosystem  connect partners and integrate system of systems – New Pricing models  Pay as you need – New types of aftermarket services – AI for automated decisions and analysis – Real-time operational data platforms – Personalization offer and services  Customer centric – Smart, connected and integrated products and services
  28. 28. Emerging Supply Chain Strategies • Last Mile Delivery Models (e-commerce) – Crowd sourced – Parcel terminals – Electrical tricycles – Drone deliveries – Digital lockers • New types of warehouse solutions – Smart and Mobile
  29. 29. Next step • How to start your Digital Supply Chain Transformation? – Vision statement – Strategy roadmap – Manage pilot projects – Measure maturity in processes – Business Model Discovery digitalstrategy-ai.com
  30. 30. Contact • info@danarmustafa.se • LinkedIn: https://www.linkedin.com/in/danarmustafa • danarmustafa.com • digitalstrategy-ai.com

Editor's Notes

  • https://www.bcg.com/publications/2015/engineered_products_project_business_industry_4_future_productivity_growth_manufacturing_industries.aspx

    https://www.bcg.com/digital-bcg/digital-transformation/overview.aspx

  • https://www.supplychaindive.com/news/digital-freight-forwarding-supply-chain-inefficiency/527945/
  • https://www.bcg.com/publications/2018/digital-imperative-freight-forwarding.aspx
  • With the rise of huge amount data from multiple sources it is now possible to use advanced analytics to create optimal inventory level and reduce buffer inventory.
    With Internet of Things solutions data can flow in real-time from suppliers, partners and customers.
    With machine learning techniques historical data combined with data from weather and traffic forecasts it is possible to optimize transportation planning.
    With technologies such as RFID, GPS, sensors and other types of tracking technologies it is improving end-to-end visibility of material flow planning. All types of data can be translated into optimizing decision making based on real-time data.

    https://www.scmr.com/article/linking_supply_chain_performance_to_a_firms_financial_performance
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