The Software Defined Supply Chain - Full Study Results

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For more than a year, IBM has been researching the full impact of the software defined supply chain - 3D printing, advanced robotics, and open source hardware. Now, you can see how all these come together to make products cheaper, faster, and enable a new wave of start-ups.

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The Software Defined Supply Chain - Full Study Results

  1. 1. © 2012 IBM Corporation The New Software Defined Supply Chain: Preparing for the disruptive transformation of Electronics design and manufacturing The IBM Institute for Business Value Paul Brody Global Business Services Vice President and Global Electronics Industry Lead Veena Pureswaran Institute for Business Value Global Electronics Industry Lead
  2. 2. © 2013 IBM Corporation2 People can have the Model T in any color – so long as it’s black. HENRY FORD
  3. 3. © 2013 IBM Corporation3 0 100,000 200,000 300,000 400,000 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 Ford Automotive Output, 1901-1914 Shift to moving production line $5 Daily Wage Introduced Assembly time down to 1.5 hours Model T Introduction Assembly Time Per Car: 14 Hours
  4. 4. © 2013 IBM Corporation4 875,000 1,750,000 2,625,000 3,500,000 1901 1903 1905 1907 1909 1911 1913 1915 1917 1919 1921 1923 1925 1927 1929 Ford Automotive Output, 1901-1924
  5. 5. © 2013 IBM Corporation5 STANDARDIZATION 0 1,000,000 2,000,000 3,000,000 4,000,000 1901 1907 1913 1919 1925 D I G I T I Z A T I O NMODULARIZATION TRADITIONAL ASSEMBL MODULAR ASSEMBLY 0 300 600 900 TOTAL COST $ NUMBER OF PARTS ASSEMBLY TIME (MIN) MASS (KG) 800 686 104 1 63 56 22 3
  6. 6. © 2013 IBM Corporation6 PARTSCUSTOM STANDARD COMPONENTS MODULESASSEMBLY MECHANICAL DIGITALCONTROLS 3 KEY RULES OF PRODUCT DESIGN
  7. 7. © 2013 IBM Corporation7 3 CHARACTERISTICS OF INDUSTRY STRUCTURE & TRADE Economies of Scale BIG Multi-Tier Supply Chains COMPLEX Low Cost Supply Chains GLOBAL
  8. 8. © 2013 IBM Corporation8
  9. 9. © 2013 IBM Corporation9 3 NEW TECHNOLOGIES 3 D P R I N T I N G O P E N S O U R C EINTELLIGENT ROBOTICS
  10. 10. © 2013 IBM Corporation10 STANDARDIZATION 3D PRINTING NO ECONOMIES OF SCALE ON DEMAND MANUFACTURING LOCATION ELASTIC $0 $0.08 $0.15 $0.23 $0.30 2013 2018 2023 COST PER UNIT VOLUME PRINTED $/CUBIC CM - BLENDED AVERAGE -79% -92%
  11. 11. © 2013 IBM Corporation11 MODULARIZATION ROBOTICS HARD AUTOMATION FLEXIBLE ROBOTICS INTELLIGENT ROBOTICS $0 $75,000.00 $150,000.00 $225,000.00 $300,000.00 2005 2012 TYPICAL COST PER ROBOTIC ASSEMBLY STATION -90%
  12. 12. © 2013 IBM Corporation12 DIGITIZATION INTELLIGENCE MOORE’S LAW OPEN SOURCE 0 7,500 15,000 22,500 30,000 11/1/08 4/1/09 9/1/09 2/1/10 7/1/10 12/1/10 5/1/11 10/1/11 3/1/12 8/1/12 OPEN SOURCE HARDWARE DESIGNS ON THINGIVERSE
  13. 13. © 2013 IBM Corporation13 HARDWARE CONSTRAINED BUILD A MOLD OR CAST HARDWIRE PRODUCTION LINE DEVELOP EMBEDDED CHIP SOFTWARE DEFINED PRINT PARTS DIRECTLY BY SOFTWARE RECONFIGURE ASSEMBLY THROUGH SOFTWARE DIGITAL CONTROLS USING SOFTWARE
  14. 14. © 2013 IBM Corporation14 SOFTWARE DEFINED SUPPLY CHAIN
  15. 15. © 2013 IBM Corporation15 WHEN
  16. 16. © 2013 IBM Corporation16 Will be most affected by these technologies? Strategies should you adopt to be competitive? Are the best locations to invest going forward? Will these technologies impact investment decisions? Do I need to re- engineer my end-to-end business processes? ▶ WHO ▶ WHAT ▶ WHERE ▶ WHEN ▶ WHY
  17. 17. © 2013 IBM Corporation17 4 DIFFERENT PRODUCTS COST VOLUME SIZE COMPLEXITY PERSONALIZATION WASHING MACHINE INDUSTRIAL DISPLAY MOBILE PHONE HEARING AID
  18. 18. © 2013 IBM Corporation18 5 GLOBAL LEADERS IBM RESEARCH John Cohn PLANT LOCATION INTERNATIONAL David Zaharachuk Phil Reeves Leo Bonnanni Mike Watson Alex Scott
  19. 19. EACH PRODUCT INDIVIDUALLY TORN DOWN
  20. 20. EACH PRODUCT INDIVIDUALLY TORN DOWN
  21. 21. EACH PRODUCT INDIVIDUALLY TORN DOWN
  22. 22. EACH PRODUCT INDIVIDUALLY TORN DOWN
  23. 23. EACH PRODUCT INDIVIDUALLY TORN DOWN
  24. 24. EACH PRODUCT INDIVIDUALLY TORN DOWN
  25. 25. © 2013 IBM Corporation25 1 INTEGRATED MODEL PLANT LOCATION INTERNATIONAL
  26. 26. © 2013 IBM Corporation26 3 AMAZING RESULTS COST SCALE CO2 IMPACT
  27. 27. © 2013 IBM Corporation27 LOWER COST 0 25 50 75 100 2012 Traditional 2012 Digital 2017 Digital 2022 Digital 66 91 100100 83 91 100100 9899100100 31 8889 100 23% CHEAPER AGGREGATE NORMALIZED UNIT COST
  28. 28. © 2013 IBM Corporation28 LOWER SCALE 90% LESS VOLUME REQUIRED 0 25 50 75 100 2012 Traditional 2017 Digital 2022 Digital 17 25 100 3 29 100 17 24 100 2 24 100 AGGREGATE NORMALIZED MINIMUM ECONOMIC SCALE
  29. 29. © 2013 IBM Corporation29 NOT NECESSARILY GREENER 0 30 60 90 120 2012 Traditional 2017 Digital 2022 Digital 109 120 100 101100100 92 99100 33 89 100 AGGREGATE NORMALIZED CO2 ANALYSIS 9% HIGHER 67% LOWER
  30. 30. © 2013 IBM Corporation30 BIG COMPLEX GLOBAL SMALL SIMPLE LOCAL
  31. 31. © 2013 IBM Corporation31 HEARING AID CASE CHEAPER $0 $125 $250 $375 $500 2012 BASELINE 2012 DIGITAL 2017 DIGITAL 2022 DIGITAL $132 $370$375 $425
  32. 32. © 2013 IBM Corporation32 HEARING AID CASE GREENER 0 25 50 75 100 2012 BASELINE 2012 DIGITAL 2017 DIGITAL 2022 DIGITAL 33 88 100100
  33. 33. © 2013 IBM Corporation33 HEARING AID CASE LOCAL Traditional Supply Chain Model
  34. 34. Software Defined Supply Chain - 2012 © 2013 IBM Corporation34 HEARING AID CASE LOCAL
  35. 35. Software Defined Supply Chain - 2017 © 2013 IBM Corporation35 HEARING AID CASE LOCAL
  36. 36. Software Defined Supply Chain - 2022 © 2013 IBM Corporation36 HEARING AID CASE LOCAL
  37. 37. © 2013 IBM Corporation37 RECOMMENDATIONS FOR INDUSTRY IMPLICATIONS Product design and retailing will be influenced greatly by interactions with customers Competitive dynamics of the industry will change radically Supply Chains will become more simple, flexible and localized Change how you design and sell products1 Prepare for the new competitive landscape2 Build extraordinary flexibility into your supply chain structure3 RECOMMENDATIONS
  38. 38. © 2013 IBM Corporation38 FULL REPORT AND MODEL AVAILABLE IN JULY 2013 IBM Institute for Business Value ibm.com/business/value/software-defined-supply-chain ITUNES OR ANDROID APPSTORE SEARCH IBM IBV

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