This presentation gives a high level overview on the deployment opportunities of analytics in the electronics supply chain space given the actual supply chain trends within the global electronics industry.

1. December 2013
Global Trends in Supply Chain Management and role of
Analytics towards a Smarter Value Chain
A strategic Point of View
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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2. This presentation covers 3 topics
1
Latest Trends in
Electronics
Supply Chains
2
Role of Analytics in
Supply Chain
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
3
How to get Started
with Analytics
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3. Increase in interconnectivity
among electronic products
leading to explosion of data
and information
Emerging markets
Electronics
Trends
stimulating growth for electronics products
and services
Industry convergence
creating opportunities
for new business models
and revenue streams
Empowered customers
driving demand for new
and innovative products
and services
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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4. The complexities and challenges of today’s economic environment require new
vision and new rules for supply chain*.
See what
others don’t
Visibility
Volatility
Know the
customer as well
as yourself
Value
Exploit global
efficiencies
* IBM Institute of Business Value - Supply Chain Study
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5. Visionaries and planners are investing to build strategic, smarter supply chain
capabilities – Analytics plays key role
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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6. New Rule for a New Decade #1: Know the customer as well as yourself
Predict demand and be in a position to react to demand variability and market volatility with rapid response and
allocation of all global resources!
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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7. New Rule for a New Decade #2: See what others don’t
Collaborate with insight and visibility to events, with suppliers, service providers and customers in an open, action-oriented,
environment.
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8. New Rule for a New Decade #3: Exploit global efficiencies
Dynamic Optimization! Optimize pipeline inventory, the global network, and cost structures. Create cost-efficient,
sustainable practices while hedging risks.
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9. Visionaries enjoy higher ROIC, high inventory turns, and sustained revenue
growth performance.
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10. Who are the Visionaries?
Globally recognized Leaders in Industrial Supply Chain Management
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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11. and there is more – the REAL revolution in supply chain will be a…….#1
The Software Defined
Supply Chain?
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12. 1
2
The software defined supply chain will radically change the way we will design supply
chains.
Traditional Manufacturing
3D Manufacturing
Centralized Manufacturing
Local/Distributed Manufacturing
Complex Inbound Logistics
“Last Mile” Inbound Logistics
Complex Outbound Logistics
“Last Mile” Outbound Logistics
Significant Logistical Lead Times
Near Zero Logistical Lead Times
Significant Transportation Costs
Minimal Transportation Costs
Complex Tax & Transfer Pricing
Local Tax & No Transfer Pricing
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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13. FULL REPORT & MODEL NOW AVAILABLE
ONLINE AND ON YOUR MOBILE DEVICE
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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14. and #2….. The Internet of Things…has not yet taken off with consumers or
enterprises….but it will….
Proportion of Heavy Industrial
Equipment That Is Networked
30%
Proportion of Smart TVs being
used for Internet Viewing
10%
Icons from the Noun Project, creative commons license. Data from IBM research as of 2013.
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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15. …analytics enabled
In Summary
A Smarter
Supply
Chain is…
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
…connected and integrated
towards E2E visibility
…globally integrated
…supporting a software defined
supply chain design
…recognizing the power of the
Internet of Things
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16. This presentation covers 3 topics
1
Latest Trends in
Electronics
Supply Chains
2
Role of Analytics in
Supply Chain
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
3
How to get Started
with Analytics
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17. “In God we trust, all
others must bring
data.”
W. Edwards Deming
IBM17
Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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18. To address the challenges of Volatility, Visibility and Value, Supply Chain
Officers of Electronics companies must answer these questions
Can I make a tax optimized
supply chain? Can I build what
if scenarios to assist
decisions?
Can I predict which part or
system is about to fail?
How do I manage risks
and disruptions in a
globalized supply chain?
How can better financial
and demand forecasting
improve the performance
of my business?
How do I ensure that
inventory is maintained at
optimal levels?
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
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© Copyright IBM Corporation 2013 • All rights reserved
?
How can I reduce warranty
costs by optimizing reverse
logistics?
How can I improve
visibility into the overall
supply chain?
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19. Analytics can help companies gain visibility, control volatility and create
value.
Customer
Collaboration
Pervasive
Visibility
Decision-support to
automate supply chain
transactions
Multi-partner collaborative
platform
Sense-and-respond demand
& supply signal notification
Smart devices & sensors
(RFID) to capture real-time
visibility
Simulation models of
customer behavior
Cost to serve models and
analysis
Networked S&OP
Customer collaboration
throughout all SC processes
Embedded software &
analytics for automated
product defect and service
alerts
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Networked
Risk Management
Risk adjusted inventory
optimization
Probability-based risk
assessment & predictive
analysis
Compliance strategies &
policies with suppliers,
service providers, contract
manufacturers
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20. Analytics and Optimization provides value across the key supply chain
processes.
Plan
Source
Make
Deliver
Return
Demand Forecasting
2-5% manufacturing
costs saving
10-30% inventory cost
Multi-echelon Inventory Optimization reduction
5-15% supply chain cost reduction
~30% channel inventory reduction
Supply Chain Visibility
25% procurement
spend
reduction
Procurement Spend Optimization
10-15% Improved warranty and repair order fulfillment,
reduced spares inventory, and warranty costs
Reverse Logistics Optimization
Supply Chain Network
5-15% supply chain costs saving
Optimization
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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21. IBM Client Case Study
What if…
You could optimize
inventory levels and
reduce the risk of
customer demand
variations?
Supply Chain Disruption
Inability to optimize inventory due to customer demand / channel
variability which eroded sales and increase costs
Solution
Implemented analytics-driven solution that systematically tracks
product movement and launches promotional campaigns based
on product stock level, availability and current demand forecasts
Analytics Benefits
Improved client’s risk posture, including the ability to optimize
inventory, react to demand trends and increase revenue
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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22. IBM Client Case Study
What if…
You could account for
constraints when
forecasting sales?
Supply Chain Disruption
Market instability and resultant supply chain network instability lead
to customer dissatisfaction with unmet delivery obligations
Solution – Dynamic Inventory Planning
Implemented a predictive, advanced inventory-control system that
enables dynamic inventory planning, a “what-if” analyzer and
inventory forecasts across distributor locations
Analytics Benefits
Profile and target customers based on buying trends, coupled with a
logic-based promotion module,
Launch product-specific promotions and replenish inventory
according to actual demand streams
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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23. IBM Client Case Study
What if…
You could identify
failure problems
before they
occurred?
Supply Chain Disruption
Equipment downtime
Solution – Predictive asset optimization
Analytics solution to predict failure patterns and identify root
cause of the problem while determining the reliability of every
asset at any point in the future. Inspections and maintenance can
be performed at the optimal and most cost-effective moment
Analytics Benefits
Eliminates undue maintenance, prevention of costly downtime /
repairs and reduction in MRO inventory carrying costs.
Saved $1 million in two weeks and 1400% return on investment in
just four months
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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24. IBM Client Case Study
What if…
You could optimize
your supply chain
while reducing energy
consumption?
Supply Chain Disruption
Determine the financial and environmental impact of changes to any
element within that supply chain
Solution – Supply Chain Scenario Modeler
Analytics solution with four predictive analytic models all driving a fifth
engine showing actual profit & loss impact to create supply chain
optimization with reduction in carbon footprint
Analytics Benefits
Link operational decisions to board room view (P&L impact estimation)
Integrated key supply chain planning areas in one model (inventory,
network, routing) $100 million in working capital savings
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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25. Global LCD Manufacturer
IBM Client Case Study
Reduced manufacturing lead time, inventory and improved delivery commitment using GiView while
significantly reducing IT costs and building a total business system
Integrated five-layered SOA based GiView solution was designed and delivered over seven
phases to efficiently manage flexible and agile production planning and delivery commit
Global PC Supplier
Planning cycle time and accuracy were improved and coordination across multiple plants was achieved.
ILOG Plant Power Ops (PPO) was used to coordinate production plans across different sites producing
finished and semi-finished goods, improve the production planning process, cut down planning cycle time
significantly
A Fortune 500 Internet Portal company
Realized 1.08M USD in savings through efficient management of mobile devices and wireless expenses optimization
Used Emptoris Telecom Expense Management solution for wireless devices with implementation of a multitude
of wireless managed services including end user wireless portal, wireless optimization projects, help desk to
give ROI in under a year. International rate plan optimization reduced call cost per min by 50% even as there was
a 33% increase in international minutes
IBM25
Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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26. Telco improves business insight into
huge volumes of data with IBM
InfoSphere Streams
Need
• A solution to perform efficient, near-real-time
analytics in order to help drive more meaningful
decision making. Sprint wanted to gain strategic
insight into the needs of its customers.
Benefits
• Increased transaction capacity by 90 percent
• Enabled informed, near-real-time strategic decision
making
• Created cost savings through consolidation of legacy
solutions
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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27. Telco scales data management success
with PureData System for Analytics
Need
• Provide longer retention and more meaningful results for click
stream data
Benefits
• Reduce tax and call-routing fees by using the data stored to
defend against false claims
• Acquire dropped-call and churn-reduction analysis capabilities
• Increase network availability by identifying and fixing any
network “holes”
• Storage capacity increased from 100 TB to 2 PB
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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28. Manufacturer improves analysis of
petabytes of data to optimize capital
investments
Need
• Model the weather to optimize placement of turbines,
maximizing power generation and longevity
Benefits
• Reduce time required to identify placement of turbine
from weeks to hours
• Reduces IT footprint and costs, and decreases energy
consumption by 40 % -- while increasing
computational power
• Incorporate 2.5 PB of structured and semi-structured
information flows. Data volume expected to grow to 6
PB
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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29. Analytics in Service Supply Chain: GE takes holistic view towards its install
base and the role of predictive analytics towards GE‘s buttom line.
At GE, 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
Jeff Immelt, CEO GE, June 19, 2013
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 201329 All rights reserved
•
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30. This presentation covers 3 topics
1
Latest Trends in
Electronics
Supply Chains
2
Role of Analytics in
Supply Chain
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
3
How to get Started
with Analytics
Page - 30

31. The Supply Chain Analytics journey can start with a Business Value
Accelerator followed by a recommended pilot strategy and deployment.
Assess
Design and
Specify
Build and
Analyze
Recommend
Next Steps
Phase 1: BVA
Focus
Inventory Optimization
Demand Forecasting
Procurement Spend Optimization
Reverse Logistics Optimization
Supply Chain Visibility
Supply Chain Network Optimization
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Phase 2: Pilot
Phase 2: Pilot
Conduct
Solution
Impact
Assessment
Design and
Build Pilots
Phase 3: Deploy
Prepare
rollout plans
Training and
Deployment
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32. IBM’s supply chain Business Value Accelerator (BVA) helps define a winning
strategy and supply chain implementation roadmap for electronics clients
How To Get Started
Our BVA offers the following features:
Current state assessment in supply chain
analytics and target state vision
Target state solution design
Build prototype for key functions and analytical
modeling using your data
Develop high level business case
Benefits
Gain data-enhanced insights – delivered rapidly with a
minimal investment to start,
Get a fresh perspective – opportunity to leverage IBM’s
architecting and analytical capability and market-leading
insight,
Explore potential opportunities – open doors to
opportunities to deliver significant value and competitive
advantage in your business.
Report back with findings and insights, next steps
Potential Follow-on Activities
Pilot / Rollout
Targeted SCM analytics projects
Analytics Center of Excellence
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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33. Once we agree on a key focus area, we will deliver results and recommenddations within 6-10 weeks in a BVA engagement
1
3
2
Assess
o Current state assessment based
on existing landscape,
capabilities. Identify key pain
points (example manual CPFR),
impacted metrics like forecast
accuracy
o Target state supply chain vision
o Identify key supply chain
opportunities
4
Design &
Specify
Build &
Analyze
Recommend
o Design solution framework
aligned to target state vision
o Build prototype of key functions
in identified SCM process(es)
o Understand your existing data
models in target supply chain
process(es), value drivers and
how data is currently used
(Exploratory Data Analysis)
o Prepare models and run models
using tools and methods agreed
o Analytics design and approach
o Prepare proof of concept
findings and report
o Develop estimate and quantify
SCM benefit opportunity
o Compose final report
summarizing analysis results
and recommendations
o Create pilot implementation plan
and resource schedule
o High level costs and business
case
o Final presentation to
stakeholders
o Determine next steps
Outputs:
Stage
• Assessment Scores
2. Design
• Prototypes or Proof of Concept
3. Analysis
Week 3-4
Week 4-8
Week 9 - 10
1. Assess
• Exploratory Data Analysis
Week 1-2
• Proposed SCM Roadmap
Receive data
Test prototype and analytical
models
4. Recommendations
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
Page - 33

34. This presentation covered 3 topics
1
Latest Trends in
Electronics
Supply Chains
2
Role of Analytics in
Supply Chain
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
3
How to get Started
with Analytics
Page - 34

35. "I'd like you to think of big
data as the next natural
resource”
2013, IBM CEO Ginni Rometty
IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence
© Copyright IBM Corporation 2013 • All rights reserved
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36. 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.ibm.com/electronics
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