The document discusses the concept of a connected supply chain and the digital transformation of supply chain management. It covers topics like planning, data and analytics, talent, technologies like IoT, blockchain and additive manufacturing. The author advocates for embracing new technologies at the right time, focusing on capabilities, and managing complex systems. The document is written by Lora Cecere, founder of Supply Chain Insights LLC, to provide insights for supply chain leaders.

1. The Connected Supply
Chain
April 2018
For the Supply Chain Leader Who Wants to Rise Above

2. Supply Chain Insights LLC Copyright © 2018, p. 2
I Am A Social Scientist

3. Supply Chain Insights LLC Copyright © 2018, p. 3
The Work that We Do

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I Write for the Supply Chain Leader

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• Outside-in
• Synchronized (versus Integrated)
• Horizontal (versus Vertical) Process Excellence
• Data at the Speed of Business
• Data-Driven Insights
• Sensing before Response
What Is The Connected Supply Chain?

6. Supply Chain Insights LLC Copyright © 2018, p. 6
It Is Not…

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Planning Is….
A River that Flows Through the Value Network

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Today’s Reality

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Third Industrial Revolution Productivity Impact
Stopped in 2004

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Risk Drivers

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Inventory

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Normal
Distribution
SKU/L
SalesVolume
Anything But Normal
The “Long Tail” is Growing

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Why? Commodity Pressures

14. The Manifesto for
Change

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What I Believed

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Only 12% Of Companies Are Driving Improvement and
Performance Better Than Their Peer Group at the Intersection
of Operating Margin and Inventory Turns.

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Customer Service
The Supply Chain Is a Complex System with
Increasing Complexity.

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2006
2016
6.6
6.8
7.0
7.2
7.4
7.6
7.8
8.0
0.08 0.09 0.10 0.11 0.12 0.13 0.14 0.15
InventoryTurns
Operating Margin
Food
Best
Scenario
Food
0.11, 7.38
Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2016 from YCharts
Shifts in the Food Manufacturing Market
Operating Margin vs. Inventory Turns (2006 - 2016)

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Gaps in Alignment

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Functional Management of Costs: Manage Costs
Like a Decathlete

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Efficient Is Usually Not Effective

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What Makes a Difference?

24. Driving a Digital
Transformation

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What Is Next-Generational Thinking?

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Today’s Reality

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Current Supply Chain Process Thinking
Rows and Columns:
Transactional Data
Fixed Hierarchies with
Structured Data
One-to-One Enterprise Linear Flows
Descriptive and Predictive Analytics

28. Supply Chain Insights LLC Copyright © 2018, p. 28
Digital Supply Chain:
Transforming the Atoms
and Electrons of the
Supply Chain through the
Confluence of
Technologies
What Does Digital Transformation Mean for
You? There Is No One Definition

29. Bar codes were first used at Marsh Supermarket in 1968

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Use of Downstream Data

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Impact of Localized Assortment

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Sentiment: The Need to Listen

36. New Forms of Analytics

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Data Needs to Move Securely Through Value
Networks In…
Clouds Streams Pools

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Need for New Forms of Analytics

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Evolution of Insights

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Evolution of Cognitive Computing

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Redefining
Time

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Internet of Things

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Rich user interface in full HD
Evocative sound track with
burring grinder and tinkling
of spoons
Memorable flavours and
fragrances
Cutting edge reliable /
ultra efficient computer
processing hardware
Stunning curved design by
Italian automotive designers
Irresistible aromas of Costa’s
coffee shops
Innovative coffee-making
system providers
Redefining Replenishment

45. Supply Chain Insights LLC Copyright © 2018, p. 45
1.5M sku locations
~ 95% slow or intermittent
Seasonal demand (at the item level) is identified down to a specific
location.
Simplified for clarity In reality, looks more like this
•365 days
•150+ local climates
•Avg 3,000 items / location (165M)
•15 year lifecycle changing amplitude
Lennox International

46. Supply Chain Insights LLC Copyright © 2018, p. 46
•Replace
•Compressor
•Engines
• Dealer gets service event
• We get parts sales
• Customer has non-event
• Customer - Dealer & Brand loyalty
Your compressor shows that it will fail
within the next 30 days. What day would
be good for us to come replace it?
Redefining Service

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Transforming Inbound Logistics
Mobile Device Apps
AIS Vessel Location
Sensors

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Improved On-Time
Delivery

49. Digital Manufacturing

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What Is Digital Manufacturing?
Additive
Manufacturing
Paperless Processes Robotics

51. AGCO Manufacturing Redefinition

52. Network of Networks

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The adoption of distributed and open technology
by the ecosystem of technology providers and
business users to drive inter-operability in value
networks to improve business outcomes.
What Is the Network of Networks?

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What Does Not Work

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Future View

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Write once and use company and contact information many times.Community Directory
• Reduce onboarding through once source of data.
Blockchain redefines visibility and track and trace.Traceability
• Confluence of Blockchain and Spark/Internet of Things Redefine Lineage.
Bitcoin and Blockchain disintermediate traditional banking.Supply Chain Finance
• Emergence of the supply chain digital wallet.
• An alternative to EDI.
Cognitive computing eliminates the need for master data
management and standards.Interoperability
• Data is mined through patterns and translated for context through cognitive computing.
Shift from standards to process canonicals.
What Could Change?

57. Rethinking Planning

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Shifts in Planning Architecture

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• A pattern caused by order frequency, order quantity or batch size.
• A type of demand: trade promotion, new product launch, seasonal
consumption.
• A product build to execute a supply chain strategy.
Life for a supply chain planner is not as easy as it used to be.
What Is a Demand Flow?

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Data
Inputs
Engines Demand
Plan
Outputs
Align Engines with Outcomes
Planning Master Data

61. Talent

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Baby Boomers, Vendors, Academics, and Remote
Employees Are Most Satisfied with Their Jobs

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Today’s Challenges

65. Moving Forward

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• Outside-in
• Synchronized (versus Integrated)
• Horizontal (versus Vertical) Process Excellence
• Data at the Speed of Business
• Data-Driven Insights
• Sensing before Response
What Is The Connected Supply Chain?

68. Supply Chain Insights LLC Copyright © 2018, p. 68
Wrap-up
• Embrace New Technologies at
the Right Time.
• Focus on Capabilities. Build
with the Goal in Mind.
• Manage the Supply Chain as a
Complex System.

69. Supply Chain Insights LLC Copyright © 2018, p. 69
Time to Take a Different Path?

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About Lora Cecere
• Founder of Supply Chain Insights
• “LinkedIn Influencer”
• Guest blog for Forbes
• Author of 5 books: Bricks Matter (2012), Shaman’s Journal (2014),
Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015),
Shaman’s Journal (2016), Shaman’s Journal (2017)
• Partner at Altimeter Group (leader in open research)
• 7 years of Management Experience leading Analyst Teams at
Gartner
and AMR Research
• 8 years Experience in Marketing and Selling Supply Chain Software
at Descartes Systems Group and Manugistics (now JDA)
• 15 Years Leading teams in Manufacturing and Distribution
operations for Clorox, Kraft/General Foods, Nestle/Dreyers Grand
Ice Cream and Procter & Gamble.
Contact Information:
• Email: lora.cecere@supplychaininsights.com
• Blog: www.supplychainshaman.com (15,000 pageviews/month)
• Forbes: www.forbes.com/sites/loracecere
• Twitter: twitter.com/lcecere (8,700 followers)
• LinkedIn: www.linkedin.com/in/loracecere (255,000 followers)
• LinkedIn Influencer: www.linkedin.com/today/author/446631