20130917 the future of supply chain management - a strategic viewpoint - sanitized

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I gave this presentation in September 2013 in front of a Supply Chain Operations team at a Electronics manufacturer.

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20130917 the future of supply chain management - a strategic viewpoint - sanitized

  1. 1. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 1 September 2013 The Status Quo & Future of Supply Chain Management A strategic “Point of View”
  2. 2. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 2 What is the carbon footprint of an iPhone? iPhone 4: 53kg CO2 iPhone 5: 75kg CO2 http://www.carbonfootprint.com/energyconsumption.html
  3. 3. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 3 Thank You For The Invitation • Thorsten Schroeer • Member of IBM Global Electronics Industry Center of Competency • IBM consulting practice „Global Business Service“ • Work Experience • 8 years IBM’s Electronics Industry • 5 years IBM Supply Chain Consulting Practice • 5 years Ryder Supply Chain Solutions • 1 year Fraunhofer Institute Material Flow & Logistics • 15 years member www.CSCMP.org • Education: • Masters Mechanical Engineering, Dortmund • Masters Industrial Engineering, Atanta
  4. 4. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 4 This presentation will cover four key areas 2What SCM Leaders do? 3What is the software defined Supply Chain? 4How to get to the next level? 1What is the starting point?
  5. 5. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 5 Our modern notion of the supply chain began with Henry Ford.
  6. 6. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 6 Complex supply chains evolved with multi-tier supplier networks with largest carbon footprint ever.
  7. 7. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 7 It’s been a function of our global supply chain that we leverage these three rules of product design Parts Assembly Controls Custom Components Mechanical Standard Modules Digital
  8. 8. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 8 And this approach led us to three characteristics of industry structure and trade that go well beyond electronics Economies of Scale Multi-tiered Supply Chains Low cost suppliers BIG COMPLEX GLOBAL
  9. 9. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 9 This presentation will cover four key areas 1What is the starting point? 2What SCM Leaders do? 3What is the software defined Supply Chain? 4How to get to the next level?
  10. 10. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 10 Globally recognized Leaders in Industrial Supply Chain Management * * Source: Gartner 2013 Supply Chain Top 25,, IBM Point of view
  11. 11. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 11 SIMPLIFICATION: Apple has implemented one of the most rigorous and disciplined simplification models worldwide. The Apple way - Almost no promotions, No B2B products, B2B channels, simplified order handling rules, one single, integrated back end, no real “configuration”. Under Tim Cook we have seen most successful SCM war won ever on complexity and order management via simplification.
  12. 12. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 12 Standardization – Electronics company developed a cross business unit aligned process framework to support standardization and measurable business outcome via APQC reference process framework. APQC Industry Process Framework – Open Standard, Industry Specific – 20 years of Industry Peer review, widely adopted in the industry – Strong references towards SCM – Key focus on benchmarking
  13. 13. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 13 Visibility: Electronics company deployed control tower concept to monitors KPIs and production status with global alerts, timely problem identification and decision resolution. VP Manufacturing View Management COO View CSCO View Profit Navigation Manufacturing Cockpit Supply Chain Network
  14. 14. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 14 3rd party Transformation: IBM‘s Supply Chain Logistics Transformation journey serves as role model for 4PL logistics partnerships. IBM and 3PL sign a five-year contract for the distribution of all finished goods, customs formalities and reverse logistics, throughout Europe, Middle East and Africa IBM extends the agreement to include Spain and Portugal 1999 2002 IBM and 3PL sign a five- year contract for the pre and post production logistics of IBM eServers made in Dublin 2008 2004 3PL signs a contract with IBM covering all end of lease returns from clients across Europe 3PL signs multi year outsourcing contract with IBM and acquires its global logistics operations 1998 IBM outsources logistics to 3PL in a five-year contract for France, Germany and Italy. 3PL acquires IBM assets, including warehouses across Europe – 750 IBM employees join 3PL 2009 2012 Project moves resources with IBM expertise to 3PL for the beginning of a long-term logistics partnership Logistics steady state attained with ongoing global standardization and enhancements
  15. 15. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 15 Collaboration - A typical collaboration platform for the supply collaboration and replenishment process, example packages are E2Open or Sterling.
  16. 16. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 16 Self Service – Electronics company developed Online Order Process to manage lead times in a pure build to order process. Production
  17. 17. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 17 Big Data & Analytics: IBM’s supply chain drives towards smarter supply chain analytics. IBM employs analytics on an evolving platform of Big Data and multi-enterprise supply chain visibility. Volume Velocity Variety Descriptive Predictive Prescriptive Business Analytics Big Data Platform IBM Buy Analysis Tool Critical Parts Management Tool Quality Early Warning System IBM Supply Chain Examples Supplier Risk Management Other… IBM recognized as a leading innovator for 2012 in the Electronics Industry on the basis of the QEWS solution September 17, 2012 Issue
  18. 18. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 18 At XX, the biggest part of our company is our installed base – the machines. Embedding them with more sensors and having the ability to do analytics allows us to get more out of the products. We can offer -- as a service -- not just real time data but real time knowledge. We can drive efficiency. For a long time our service approach was “break-fix.” It was successful model, but not sustainable. Today customers don’t want their products to break; they can’t wait for the fix, nor can they afford to. They don’t want any unplanned downtime or outages. They want guaranteed outcomes. 18 Analytics in Service Supply Chain: Electronics company takes holistic view towards its install base and the role of predictive analytics towards buttom line. CEO Compnay, June 19, 2013
  19. 19. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 19 This presentation will cover four key areas 1What is the starting point? 2What SCM Leaders do? 3What is the software defined Supply Chain? 4How to get to the next level?
  20. 20. The Software Defined Supply Chain? A Study Overview 20
  21. 21. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 21 3 key software enabled trends will drive towards a software defined supply chain in the future.
  22. 22. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 22 Our old hardware constrained universe is now a choice, not a requirement. We can not simply share apps, we can share things in a digital space – and be rewarded for it
  23. 23. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 23 3D Printing in Industrial Context – Case Studies Siemens AG http://www.youtube.com/watch?v=VyEgbyNg0Q8
  24. 24. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 24 3D Manufacture Standardization
  25. 25. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 25 Robotics Modularization
  26. 26. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 26 Intelligence Digitization Moore’s Law Open Source
  27. 27. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 27 Using one example from our study –we find dramatic changes in a supply chain that is small, simple and local Cost Carbon Footprint
  28. 28. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 28 How 3D printing could revolutionize your industry?
  29. 29. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 29 The market is already expressing itself, albeit with a “toes in the water” approach – which we think is smart. In May 2013, Staples started carrying 3D printers http://www.gizmag.com/staples-selling-3d-printers/27399/ http://www.technology-digital.com/web20/ups-to-offer-3d-printing-service-in-retail-stores In August 2013, UPS announced in- store 3D print services 3D printed Solar Cell MIT's Department of Materials Science and Engineering
  30. 30. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 30 Centralized Manufacturing In summary the software defined supply chain will radically change the way we will design supply chains. Complex Inbound Logistics Complex Outbound Logistics Significant Logistical Lead Times Significant Transportation Costs Complex Tax & Transfer Pricing Local/Distributed Manufacturing “Last Mile” Inbound Logistics “Last Mile” Outbound Logistics Near Zero Logistical Lead Times Minimal Transportation Costs Local Tax & No Transfer Pricing Traditional Manufacturing 3D Manufacturing
  31. 31. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 31 70% of Supply Chain Executives are unpreparred for this transformation*.
  32. 32. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 32 Implications and Recommendation are BOLD.
  33. 33. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 33 Five questions you might want to ask yourself, as you journey into these waters
  34. 34. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 34
  35. 35. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 35 This presentation will cover four key areas 1What is the starting point? 2What SCM Leaders do? 3What is the software defined Supply Chain? 4How to get to the next level?
  36. 36. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 36 3 6 Synchronize supply & manage demand (S&OP, IBP, CPFR, Demand Sensing, Collaboration, Social Supply Chain) Apply customer & supply chain segmentation. Operate demand driven push-pull supply chain. Enable postponement/late customization. Integrate manufacturing execution and planning elements Plan for the manufacturing revolution „The Software Defined Supply Chain“ Apply Smarter Supply Chain Analytics & Big Data, Enable fact-based decision-making -> Advanced Risk Management Analytics Provide superior customer fulfillment through logistics excellence 6 Key Supply Chain Design Guidelines
  37. 37. 37 37 InnovationInnovation GlocalGlocal VisibilityVisibility Self-HealingSelf-Healing Plug & PlayPlug & Play SustainabilitySustainability Big DataBig Data Gen NowGen Now Hyper connectedHyper connected Social BusinessSocial Business Client-centricClient-centric Digital/Social ageDigital/Social age Analytics & Automation Analytics & Automation FlexibilityFlexibility Control Tower Control TowerCash conversion Cash conversion “On Demand” has become “Before I even ask” “On Demand” has become “Before I even ask” WatsonWatson The IBM ISC has become a collaborative, end to end, intelligent network focused on client value and cash conversion Build your Vision of the Future Supply Chain…
  38. 38. What is the carbon footprint of an iPhone? iPhone 4: 53kg CO2 iPhone 5: 75kg CO2 http://www.carbonfootprint.com/energyconsumption.html 38 iPhone 8: ?? CO2
  39. 39. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 39 This presentation covered four key areas 1What is the starting point? 2What SCM Leaders do? 3What is the software defined Supply Chain? 4How to get to the next level?
  40. 40. IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence © Copyright IBM Corporation 2013 • All rights reserved Page - 40 Let’s Stay In Touch thorsten.schroeer@de.ibm.com www.linkedin.com/pub/thorsten-schroeer/2/b40/a77 www.xing.com/profile/Thorsten_Schroeer IBM Electronics www-935.ibm.com/services/us/gbs/industries/electronics/

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