Smarter Supply Chain – IBM Case Study in Supply Chain Transformation and Innovative Use of Analytics

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Presented by Mr Steve Bayline, Senior Manager of IBM's Smarter Supply Chain Analytics at NUS-ISS on 12 Jun 2014.

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Smarter Supply Chain – IBM Case Study in Supply Chain Transformation and Innovative Use of Analytics

  1. 1. The linked image cannot be displayed. The file may have been moved, renamed, or deleted. Verify that the link points to the correct file and location. Steve Bayline Senior Manager, Smarter Supply Chain Analytics Smarter Supply Chain – IBM Case Study in Supply Chain Transformation and Innovative Use of Analytics © 2014 IBM Corporation June 12, 2014
  2. 2. IBM Supply Chain Transformation & Role of Analytics © 2014 IBM Corporation Select Supply Chain Analytics Solution Profiles Lessons Learned and Skills 2 © 2014 IBM Corporation
  3. 3. The ISC is undergoing an analytics led, technology-enabled supply chain transformation Globally Integrated Enterprise Smarter Supply Chain New Era Supply Chain Reinvention © 2014 IBM Corporation Enterprise efficiencies Streamlined Global processes Information sharing Advanced Analytics, Optimization, Big Data Management Supply Chain Transparancy Multi-enterprise supply chain transformation Evolving Supply Chain Management from cost center to value center… Watson Enabled analytics Network Orchestration Agile / Resilient Visibility / Transparency Data Driven /Digitally Executed Business Impact 2013 Cash Collected : $99B 2013 Managed Spend : $53B >20K Employees in 70 countries $7B in procurement saving annually 18K+ suppliers connected online >96% of invoices are electronic 32 Smarter Analytics projects Over 3.9M visits to eTools 3
  4. 4. Integrated Supply Chain Strategy in the New Era New era workstreams Analytics + Expansion Systems of Engagement © 2014 IBM Corporation Expand Cloud Capabilities Differentiated Sales Support
  5. 5. ISC Supply Chain Footprint Manage Opportunity Lead generation Pricing Salesforce mgt Source/Buy (Direct, Indirect) Collect Rev accounting Invoicing AR Align with GA Make Fulfill IBM supply chain is broader than the traditional SCOR model © 2014 IBM Corporation Asset Management (Software & Hardware) Hardware Services Software Solutions Plan Asset Management (Software & Hardware) Traditional SCOR domain Expanded ISC domain 5
  6. 6. CostCashClient/PartnerExperience B U S I N E S Centralized organization & Pervasive supply chain visibility Extended supply chain.. Opportunity to Order, Client engagement (including upstream, downstream) Our current focus for innovation is driving towards critical Supply Chain 2020 capabilities © 2014 IBM Corporation Opportunistic Orchestrated Interconnected Solutions CostCashClient/PartnerExperience S S I M P A C T Point Solutions Decentralized Traditional Supply Chain applications organization & strategy Formal prioritization process Initiate service and labor projects Initiate training programs for users 20102005 2011 2012 2015 Solutions integrated into & execution processes Point solutions integrated across multiple analytics solutions and processes Widespread use of labor analytics Cloud enablement 6
  7. 7. Prescriptive Collaborate for maximum business Cognitive Deeply analytical computing systems that learn & interact naturally with people What should we do about it? Watson Analytics We rely on several types of supply chain analytics to leverage Big Data How do we optimize a dynamic, Big Data environment? © 2014 IBM Corporation Descriptive Get in touch with reality, a single source of the truth, visibility Predictive Understand the most likely future scenario, and its business implications Collaborate for maximum business value, informed by advanced analytics What happened? What will happen? Volume (data at rest) Velocity (data in motion) Variety (many forms of data) Veracity (data in doubt) Big Data = All Data (structured, unstructured, internal, partner, public) 7
  8. 8. Clients are investing in solutions for visibility and business intelligence Predictive Asset Performance Predictive Maintenance Mobile Workforce Management © 2014 IBM Corporation8 A mining company uses analytics to improve asset performance and predict $3B of extra profit Car manufacturer develops a “Battery Traceability System” to predict and improve hybrid and EV battery performance Water Utility, integrates mobile workforce management solution with existing processes to provide real time two-way communication and access to inventory management for stock counts
  9. 9. We have built & deployed over 30 value-adding supply chain analytics solutions Manage Opportunity Request for Quote Design Solution Develop Proposal Develop Contract Manage Contract Manage Order Plan Demand Supply Manufac ture Deliver Invoice & Accounts Receivable Post Sales Support 2 4 4 4 4 4 5 13 23 30 32 1 4 36 7 8 9 10 11 14 12 15 15 16 18 19 2425 3132 4 Quote to Cash Supply Chain Business Process Framework 12 1215 15 15 15 3 2020 20 2021 2622 Source to Pay 13 15 15 15 28 © 2014 IBM Corporation Source Manage Suppliers Commodities Manage Supply Execution Procurement Engineering Manufacture Engineering Governance & Risk 12 14 1215 15 15 15 3 2020 20 2021 2224 24 24 24 24 27 2622 22 2932 IBM Price Analysis Tool Odds to Win Shipped but uninstalled Transaction Center Optimization Global client dashboard AR Optimization (NBA) AR Optimization (DM7) IBM Buy Analysis Tool Forecast Accuracy Initiative New Product Planning Supply Capability Engine Critical Parts Mgt Tool Smarter Demand Shaping Inventory Optimization Transparent Supply Chain Progile Fuel Sur-charge Hedge Global Logistics L&D Client Value Assessment Tool Supply Risk Management Tool Advanced Airline Analytics Catalog Data Optimization Pipeline Yield Assessment Quality Early Warning System Asset Re-utilizatioin Product Mgt Transform Environmental reporting tool Global Logistics Carbon Mngmt Green Sigma Proposal Text Analytics PO Dispute Avoidance CSP Propensity to Buy 1 2 3 4 5 6 7 8 9 10 11 12 13 14 17 15 16 18 19 20 21 22 17 23 24 25 27 28 26 29 30 31 32 Implemented or extending Development Key 9
  10. 10. IBM Supply Chain Transformation & Role of Analytics © 2014 IBM Corporation Select Supply Chain Analytics Solution Profiles Lessons Learned and Skills 10 © 2014 IBM Corporation
  11. 11. We harness advanced analytics to generate sustained value for IBM and our clients Transaction Center Optimization Quality Early Warning System Predictive quality mgt Cost savings, brand protection Predict required staffing Reduce costs and improve service Early detection Staff Planning Reduce Inventory IBM use cases Collaboration platform with analyticsIBM Buy Analysis Tool © 2014 IBM Corporation Radical transparency Synchronized analytics, mobile Transparent Supply Chain 11 IBM Buy Analysis Tool IBM Price Analysis Tool Price optimization Advanced analytics, speed Best pricing Total visibility analytics Right product, right place IBM Buy Analysis Tool Critical Parts Management Toolset Multi-enterprise transparency Predictive analytics Supply assurance
  12. 12. QEWS identifies trends before traditional Statistical Process Control Results from QEWS POC at external client The Solution Software system using proprietary IBM technology to detect & prioritize quality problems earlier with fewer false alarms, coupled with push alert functionality for IBM & suppliers to proactively detect & manage quality issues at any stage of product lifecycle © 2014 IBM Corporation external client Key Benefits Cost savings – $50M (2015 IBM Financial Roadmap period), approximately $10M per year hard warranty savings, additional soft savings and benefits in other areas Proactive quality mgt – identify & resolve issues before they become problems, weeks or even months earlier than traditional SPC. Improved quality mgt processes overall Improved brand value – preserves customer satisfaction through maintenance of high quality standards, protects high-stakes product launches, protects brand image Industry Recognition Recognized by the Publication ‘Information Week’ as leading innovator for 2012 in the Electronics Industry 12 Commercialization QEWS in Predictive Quality & Maintenance (PMQ) SWG product, client engagement underway
  13. 13. The Solution Uses advanced analytics to balance workload and workforce, taking into consideration different skill sets and job requirements. Enables improved workforce planning, data- driven decision making, and insight into performance of dynamic Transaction Center Optimization uses advanced analytics to manage the sales support workforce from opportunity identification thru cash collection Transaction Centers Optimization Regional Forecast Regional Forecast Local Forecasts Local Forecasts Team A Team B © 2014 IBM Corporation into performance of dynamic delivery environment. Key Benefits Improves operational efficiency by aligning staff availability with predicted workload Optimizes workload by pooling capacity across teams and identifying cross skill opportunities Reduces overtime and variable labor contracting while improving delivery performance and services provided to sales force and business partners Integrated visibility Capacity Analysis Request Assignment and Prioritization Executive Dashboard Transaction Forecasting Key Features 13
  14. 14. IBM Buy Analysis Tool (iBAT) is a visibility and analytical platform to enable better channel management & optimization Industrial OEM Contract Manufacturer Value Added Reseller (VAR) Tier 2 Distribution Tier 1 Distribu- tion Manufacturing Tier(s) Distribution Tier(s) End Customers The Solution Channel collaboration solution with advanced analytical modeling of daily demand signals to supply pipeline. Optimized replenishment decisions under price Scope of iBAT Predictive analytics Collaboration platform & data model DSR © 2014 IBM Corporation iBAT enabled System X recognized by multiple awards Tech Data 2010 Inventory Optimization Partner of the year CRN Channel Champion award IBM Research “Outstanding Accomplishment” 2011 decisions under price protection constraints. Key Benefits (accrue to both IBM & channel) Price protection expense reduce by 80% Inventory reduced by 30%, aged inventory by 25% Returns reduced by over 50% Serviceability increase by 10% Significant enhancement of visibility to channel inventory, sales, other metrics optimization opportunity Predictive analytics Incentive alignmentChannel collaboration & support processes Collaboration platform & data model DSR 14
  15. 15. IBM Price Analysis Tool provides insight into “Profit Optimized” winning prices on transaction requests The Solution Financial evaluation, simulation and win probabilities of multiple price points using recent, specific customer and general industry transaction and order histories. Segmentation of bid win histories along numerous transactional characteristics enhance accuracy of optimal price recommendation Gross Profit at Price Win Probability at Price Optimal Price for Maximum Gross Profit Client pipeline opportunities Client: Transportation/cargo © 2014 IBM Corporation Competitor solutions focus on off-the-shelf, retail products Patents granted on IBM solution – Profit optimization of complex, variable and solutions – Optimal win strategy for all elements of a multi-commodity solution Expanding roll-out at IBM across IBM products & geos recommendation Ability to price complex configurable products is first of its kind Key Benefits Proven incremental revenue and profit Approved price responses delivered within three seconds – speed Smart service which can be interfaced to any system of engagement – Currently implemented with web and mobile platforms Client: Industrial products, with complex configuration Profit max: Global footprint, local sources of supply, additional objective is capacity maximization Client: Transportation/cargo Optimize profits given capacity of containers & time element of fixed schedule. Further constraint is variable competition by transport lane 15
  16. 16. Critical Parts Management Tool provides upstream multi- tier visibility with analytics & optimization The Solution Advanced analytical tool provides visibility, management & optimization of critical parts across all upstream tiers of supply chain Key Benefits Comprehensive network visibility, © 2014 IBM Corporation Comprehensive network visibility, 75K+ SKUs, 100+ suppliers Resource savings of 50%+ of costs of managing shortages (expedites, personnel, etc) Higher levels of Customer Satisfaction, on order of 20%+ Allowed significant agility in handling supply constraints in Asia during 2011 and 2013 Industry awards in 2012 Institute Supply Mgt: Excellence in Supply Mgt ML100 Manufacturing Leadership award 16 Days to close an issue Critical parts issues 2010 2013 2010 2013
  17. 17. The Solution • The solution consolidates events across the end-to- end value chain, and applies advanced analytics for optimized cost, service levels and client experience • provide visibility across existing applications and data sources to create a predictive and smarter supply chain Our Transparent Supply Chain approach will provide 360 degree visibility to many KPIs, and an analytical platform to manage them Key early functionality Visualization, multi- enterprise, cross functional Order tracking, progression Supply prediction Point analytics synchronization © 2014 IBM Corporation Global Consolidated View Brand/BU Site Partner/Client Key Benefits Consolidated information framework – one version of the truth, actionable alerts, drill-down capability Initiates recovery either automatically (self-healing, resilient SC) or through decision feedback loops Advanced analytics and optimization – synchronized and ubiquitous Predict and act to optimize client experience Collaborate continuously in real-time across IBM and with partners 17
  18. 18. IBM Supply Chain Transformation & Role of Analytics © 2014 IBM Corporation Select Supply Chain Analytics Solution Profiles 18 © 2014 IBM Corporation Lessons Learned, Skills, and the Future
  19. 19. Project deployment & readiness to change Iterative approach Lessons learned – how to establish momentum & success with analytics Start with a business pain point Have a visualization and user interface strategy As critical as the math and analytics expertise are, transformation leadership and execution/ operations expertise is even more important (3-in-the-box management system) It is OK to start small and buildstart small and build towards major impact Iterative approachIterative approach allows you to improve your capabilities along the way and build progressively stronger stakeholder support © 2014 IBM Corporation Incentive alignment Design Compelling business benefitsCompelling business benefits for each supply chain participant (win/win/win) Reflect benefits in terms and conditionsterms and conditions Encourage utilization withEncourage utilization with PBCsPBCs Incorporate cycles of learning into the analytics solution 19 Smarter Analytics
  20. 20. Three in the Box Management System and Skills Analytics Team (Data Scientist) Transformation Team (Change Agent) Operations Leader (Domain Expert) •Statistics & Math © 2014 IBM Corporation •Statistics & Math •Analytics Software & Modeling •Scripting •Analytics Architecture •Data Technology • Data Base • Big Data •Visualization •Project Management •Change Management •Application Development •Application Architecture •Business Process Development •Implementation •Business Knowledge •Contextual data knowledge •Execution management •Business Metrics •Training
  21. 21. Cloud Attain Supply Chain Transparency Leverage Big Data & Advanced Analytics IBM supply chain network – 2020 vision Analytics Mega trends influence the development of key strategic SC capabilities © 2014 IBM Corporation Extend Multi-enterprise Supply Chain Transformation End-to-End MobileSocial Mega trends in Computing Critical 2020 SC Capability 21
  22. 22. Risk RoverQuality Quasar Procurement Prognosticator The ISC expansion to Watson for development of Smarter SC Analytics with cognitive capabilities Understands: natural language and human communication Adapts and learns from user selections and responses 1 2Ask Discover Investigate ways Watson to can help solve supply chain problems using analysis of unstructured data © 2014 IBM Corporation • Diagnosing client reported HW, SW and services problems. • Monitoring client quality and issues and proactively recommend actions based on quality patterns • Propose total risk management based on multiple factors Prognosticator • Recommend sources for product/service/ solution at best cost, quality, delivery & risk based on requisition or RFx/proposals needs Generates and evaluates evidence-based hypothesis3 Decide …built on a massively parallel architecture Possible ISC Uses & IBM Showcase opportunities 22
  23. 23. Questions & answers… and thank you © 2014 IBM Corporation23

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