Supply Chain 2030
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Presentation given at the SAPICS conference in June 2016 in Sun City South Africa on the future of the supply chain.
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Supply Chain 2030
- 1. The Race for Supply Chain 2030 Lora Cecere, Founder of Supply Chain Insights Lcecere
- 2. Disclaimer: I am a Skeptic
- 4. A Fortune-teller of Sorts….
- 5. I Write for the Supply Chain Leader
- 6. Open Content for the Market LCECERE
- 7. Research LCECERE Wiley December 2012 Self-published September 2014 Wiley December 2014 Self-published September 2015 **Coming** August 2016 18 5-Star Reviews Nine 5-Star Reviews
- 9. A Look Back 15 Years Ago #lcecere
- 11. The Pressure is ON! Nine out of Ten Companies are Stuck #lcecere
- 14. Who Is Working Well? #LCECERE
- 17. Increasing Pressure on Operations #LCECERE Since 2000, 52 percent of the companies in the Fortune 500 have either gone bankrupt, been acquired, ceased to exist, or dropped out of the Fortune 500. Activist campaigns against companies with a market cap greater than $10 billion has more than doubled since 2010. Activists won, partially won or settled 73% of proxy fights in 2014, up from 55% in 2010.
- 18. Ready for Industry 4.0? #LCECERE
- 19. New Forms of Analytics #LCECERE Operational Investments Workforce Productivity Analytics
- 20. Understanding the Current Organization A Focus on Functional Excellence #lcecere
- 22. Supply Chain as a Function #LCECERE
- 26. The Journey from Cost Management to Value Nine out of Ten Companies are Stuck #lcecere
- 28. What We Learned #LCECERE A Supply Chain is a Complex System with Complex Processes with Increasing Complexity
- 31. Dow and DuPont Stuck #LCECERE
- 32. Toyota and Honda Stuck #LCECERE
- 33. BMS and Merck Stuck #LCECERE
- 34. Novo Nordisk Making Progress #LCECERE
- 36. Supply Chains to Admire #LCECERE
- 37. Why? #LCECERE • Lack of clarity on supply chain excellence • Focus on functional excellence • Isolated projects with ROI rationalization • Lack of supply chain design • Not managing the metrics holistically across the organization
- 38. How to Get Unstuck #LCECERE
- 39. A Look Forward Supply Chain Visibility
- 40. As the Tail Gets Longer: Visibility More Important #LCECERE
- 44. Reducing the Bullwhip Impact #LCECERE
- 45. A Must for Improving the Planet #LCECERE
- 47. Steps to Make the Digital Pivot #LCECERE
- 48. Making the Digital Pivot Building Outside-In Processes #LCECERE
- 49. Looking Forward #LCECERE • Supply chains that learn as we sleep • Network of networks • Interactive UI • New business models
- 50. Steps to Make the Digital Pivot #LCECERE
- 54. Learning a New Language #LCECERE
- 55. Why Is Hadoop an Important Concept? lcecere1 ERPERP ERP ERP ERP ERP ERP Reporting Data Warehouse/Relational Database Current State
- 56. Why Is Hadoop an Important Concept? lcecere1 ERPERP ERP ERP ERP ERP ERP Reporting Nonrelational Architecture with Hadoop Current State
- 57. Analytics Evolution #LCECERE Embracing Data Variety
- 58. Supply Chains Do Not Play by the Rules #LCECERE But, what if they could?
- 60. Case Study: Internet of Things Demand-Driven Replenishment
- 62. Ultimate Ear
- 63. Opportunity at the Intersection of the Social and Interest Graph(s)
- 67. Listening Lenovo #LCECERE Canada -Customer A calls about a blue screen on a Yoga -Customer B posts on Facebook about his X220’s AC/DC adapter issues Large Enterprise Client experiences 5 keyboard malfunctions in their latest shipment. Complaints received through account executive [Critical Situation] Brazil -Customer F submits a service from on esupport.lenovo.com regarding their W530 hard drive Morocco -Customers G & H comment on their X220’s electrical issues on Twitter.com -Customer I called about Yoga screen issues Australia -Customer J write a review on NewEgg.com about AC/DC adapter issues on X220 -Customer K had an eChat with Lenovo about Yoga screen issues China -Customer L wrote on Weibo about Yoga screen issues -Customer M calls about a Tablet 8 battery issues USA -Customers C & D write X220 product reviews on amazon.com and mention issues with AC/DC adapters -Customer E posts on forums.lenovo.com that they are experiencing blue screens on their Yoga
- 68. Listening Lenovo #LCECERE Lenovo - 6 recorded issues about X220’s AC/DC adapter - 5 recorded issues about keyboard issues on X1 Carbon - 5 recoded issues about Yoga screen - 1 recorded issue about W530 hard- drive - 1 recorded issue about Tablet 8 battery
- 71. Wrap-Up #LCECERE • Supply chains are five years away from learning as we sleep. Stabilize legacy spending. • We must learn from the past to unlearn, and then rethink supply chain processes. The starting point is rewiring our brains. • Value network automation has great promise: welcome the Network of Networks.
- 74. 7 Classes • Supply Chain Metrics That Matter • Building the Customer- Centric Supply Chain • The Market-Driven Value Network Journey • Making the Digital Pivot • End-to-End Supply Chain Orchestration • Driving Improvement in Decision Making Through Supply Chain Planning • Building Agility Through Horizontal Processes
- 76. About Lora Cecere • Founder of Supply Chain Insights • “LinkedIn Influencer” • Guest blog for Forbes • Author of 4 books: Bricks Matter (2012), Shaman’s Journal (2014), Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015) • 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 (7,700 followers) • LinkedIn: www.linkedin.com/in/loracecere (100,000 followers) • LinkedIn Influencer: www.linkedin.com/today/author/446631
- 77. 7 Classes • Supply Chain Metrics That Matter • Building the Customer- Centric Supply Chain • The Market-Driven Value Network Journey • Making the Digital Pivot • End-to-End Supply Chain Orchestration • Driving Improvement in Decision Making Through Supply Chain Planning • Building Agility Through Horizontal Processes
- 81. Big Data Supply Chains are Evolving 81 Challenges: • Transactional • Time phased data Structured Data • Social • Channel • Customer Service • Warranty • Temperature • RFID • QR codes • GPS • Mapping and GPS • Video • Voice • Digital Images Unstructured Data Sensor Data New Data Types Volume Velocity Variability
- 83. Learning a New Language
- 84. Data Types
- 85. Supply Chains Don’t Play by the Rules 85 But, what if they could?
- 86. Evolution Based on Cultural Preferences
- 87. Case Study: Internet of Things
- 88. Micro Demographic Analysis of Flavor Preference by Demographics
- 89. Evolution of 3-D Printing of Human Organs
- 90. Ultimate Ear
- 91. 3D Printing
- 92. Have You Ever Thought?
- 93. Opportunity at the Intersection of the Social and Interest Graph(s)
- 94. • Newell Rubbermaid Listening: Newell Rubbermaid #Future15SB @bwdumars
- 97. 0 0 0 0 0 0 0 Canada -Customer A calls about a blue screen on a Yoga -Customer B posts on Facebook about his X220’s AC/DC adapter issues Large Enterprise Client experiences 5 keyboard malfunctions in their latest shipment. Complaints received through account executive [Critical Situation] Brazil -Customer F submits a service from on esupport.lenovo.com regarding their W530 hard drive Morocco -Customers G & H comment on their X220’s electrical issues on Twitter.com -Customer I called about Yoga screen issues Australia -Customer J write a review on NewEgg.com about AC/DC adapter issues on X220 -Customer K had an eChat with Lenovo about Yoga screen issues China -Customer L wrote on Weibo about Yoga screen issues -Customer M calls about a Tablet 8 battery issues Voice of Customer Comes in Many Forms USA -Customers C & D write X220 product reviews on amazon.com and mention issues with AC/DC adapters -Customer E posts on forums.lenovo.com that they are experiencing blue screens on their Yoga
- 98. 0 0 0 0 0 0 0 Lenovo - 6 recorded issues about X220’s AC/DC adapter - 5 recorded issues about keyboard issues on X1 Carbon - 5 recoded issues about Yoga screen - 1 recorded issue about W530 hard- drive - 1 recorded issue about Tablet 8 battery One Voice – A Single View of Perceptual Quality
- 99. Wrap-up • Supply chains are five years away from learning as we sleep. Stabilize legacy spending. • We must learn from the past to unlearn, and then rethink supply chain processes. The starting point is rewiring our brains. • Value network automation has great promise: welcome the Network of Networks.
- 102. 7 Classes • Supply Chain Metrics That Matter • Building the Customer- Centric Supply Chain • The Market-Driven Value Network Journey • Making the Digital Pivot • End-to-End Supply Chain Orchestration • Driving Improvement in Decision Making Through Supply Chain Planning • Building Agility Through Horizontal Processes
- 104. About Lora Cecere • Founder of Supply Chain Insights • “LinkedIn Influencer” • Guest blog for Forbes • Author of 4 books: Bricks Matter (2012), Shaman’s Journal (2014), Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015) • 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 (7,700 followers) • LinkedIn: www.linkedin.com/in/loracecere (100,000 followers) • LinkedIn Influencer: www.linkedin.com/today/author/446631
- 105. Disclaimer: I am a Skeptic
- 106. A Social Scientist
- 107. A Fortune-teller of Sorts….
- 108. I Write for the Supply Chain Leader
- 109. Delivering Open Content To The Market
- 110. Books to Educate Your Team Wiley December 2012 Self-published September 2014 Wiley December 2014 Self-published September 2015 **Coming** August 2016 18 5-Star Reviews Nine 5-Star Reviews
- 111. Driving Engagement - Supply Chain Insights -
- 112. 15 Years Ago
- 113. Looking Back
- 114. Pressure Is On!
- 115. Current State
- 116. Descriptors Used by Leaders
- 117. Who Has a Supply Chain That Is Working Well?
- 118. Since 2000, 52 percent of the companies in the Fortune 500 have either gone bankrupt, been acquired, ceased to exist, or dropped out of the Fortune 500. Activist campaigns against companies with a market cap greater than $10 billion has more than doubled since 2010. Activists won, partially won or settled 73% of proxy fights in 2014, up from 55% in 2010. Increasing Pressure on Operations
- 119. Productivity
- 120. Technology Evolution ERP SRM APS PLM CRM Operational Investments Workforce ProductivityAnalytics
- 122. Right Stuff?
- 123. Supply Chain as a Function
- 124. Middle Management Has Greatest Shortage of Supply Chain Talent
- 125. Growing Talent Gap
- 126. Challenges
- 127. Metrics That Matter
- 128. What We Expected
- 129. A Supply Chain is a Complex System with Complex Processes with Increasing Complexity What We Learned….
- 130. The Supply Chain Effective Frontier
- 131. Correlations to Market Capitalization
- 132. Orbit Charts: Dow Chemical Company and DuPont
- 133. Automotive
- 134. Orbit Chart: Pharmaceutical (Inventory Turns and Operating Margin)
- 135. Orbit Chart: Novo Nordisk Making Progress (Inventory Turns and Operating Margin)
- 136. Measuring Supply Chain Improvement Overall Ranking per Company • Balance: Return on Invested Capital & Revenue Growth Vector Trajectory (30%) • Strength: Inventory Turns & Operating Margin Vector Trajectory (30% of score) • Resiliency: Inventory Turns & Operating Margin Mean Distance (30%) 𝑺𝒖𝒑𝒑𝒍𝒚 𝑪𝒉𝒂𝒊𝒏 𝑰𝒏𝒅𝒆𝒙 = 𝟏 𝟑 𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝑭𝒂𝒄𝒕𝒐𝒓 + 𝟏 𝟑 𝑺𝒕𝒓𝒆𝒏𝒈𝒕𝒉 𝑭𝒂𝒄𝒕𝒐𝒓 + 𝟏 𝟑 𝑹𝒆𝒔𝒊𝒍𝒊𝒆𝒏𝒄𝒚 𝑭𝒂𝒄𝒕𝒐𝒓
- 137. Supply Chains to Admire Methodology Performance Beats the industry average for operating margin, inventory turns and ROIC for 2006-2014 and 2009-2014 Improvement Ranks above peer group average on The Supply Chain Index for 2006-2014 or 2009-2014 +
- 138. • Lack of clarity on supply chain excellence • Focus on functional excellence • Isolated projects with a ROI rationalization • Lack of supply chain design • Not managing the metrics holistically across the organization Why?
- 139. How to Get Unstuck
- 141. The Evolution of the Long Tail
- 144. Gaps in Supply Chain Visibility
- 145. Bullwhip Effect
- 146. Need for Network Ownership
- 147. Making the Digital Pivot
- 148. • Supply chains that learn as we sleep • Network of networks • Interactive UI • New business models Looking Forward
- 155. Big Data Supply Chains are Evolving 155 Challenges: • Transactional • Time phased data Structured Data • Social • Channel • Customer Service • Warranty • Temperature • RFID • QR codes • GPS • Mapping and GPS • Video • Voice • Digital Images Unstructured Data Sensor Data New Data Types Volume Velocity Variability
- 156. Analytics Maturity
- 157. Learning a New Language
- 158. Data Types
- 159. Supply Chains Don’t Play by the Rules 159 But, what if they could?
- 160. Evolution Based on Cultural Preferences
- 161. Case Study: Internet of Things
- 162. Micro Demographic Analysis of Flavor Preference by Demographics
- 163. Evolution of 3-D Printing of Human Organs
- 164. Ultimate Ear
- 165. 3D Printing
- 166. Have You Ever Thought?
- 167. Opportunity at the Intersection of the Social and Interest Graph(s)
- 168. • Newell Rubbermaid Listening: Newell Rubbermaid #Future15SB @bwdumars
- 170. Listening: Lenovo
- 171. 0 0 0 0 0 0 0 Canada -Customer A calls about a blue screen on a Yoga -Customer B posts on Facebook about his X220’s AC/DC adapter issues Large Enterprise Client experiences 5 keyboard malfunctions in their latest shipment. Complaints received through account executive [Critical Situation] Brazil -Customer F submits a service from on esupport.lenovo.com regarding their W530 hard drive Morocco -Customers G & H comment on their X220’s electrical issues on Twitter.com -Customer I called about Yoga screen issues Australia -Customer J write a review on NewEgg.com about AC/DC adapter issues on X220 -Customer K had an eChat with Lenovo about Yoga screen issues China -Customer L wrote on Weibo about Yoga screen issues -Customer M calls about a Tablet 8 battery issues Voice of Customer Comes in Many Forms USA -Customers C & D write X220 product reviews on amazon.com and mention issues with AC/DC adapters -Customer E posts on forums.lenovo.com that they are experiencing blue screens on their Yoga
- 172. 0 0 0 0 0 0 0 Lenovo - 6 recorded issues about X220’s AC/DC adapter - 5 recorded issues about keyboard issues on X1 Carbon - 5 recoded issues about Yoga screen - 1 recorded issue about W530 hard- drive - 1 recorded issue about Tablet 8 battery One Voice – A Single View of Perceptual Quality
- 173. Wrap-up • Supply chains are five years away from learning as we sleep. Stabilize legacy spending. • We must learn from the past to unlearn, and then rethink supply chain processes. The starting point is rewiring our brains. • Value network automation has great promise: welcome the Network of Networks.
- 176. 7 Classes • Supply Chain Metrics That Matter • Building the Customer- Centric Supply Chain • The Market-Driven Value Network Journey • Making the Digital Pivot • End-to-End Supply Chain Orchestration • Driving Improvement in Decision Making Through Supply Chain Planning • Building Agility Through Horizontal Processes
- 178. About Lora Cecere • Founder of Supply Chain Insights • “LinkedIn Influencer” • Guest blog for Forbes • Author of 4 books: Bricks Matter (2012), Shaman’s Journal (2014), Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015) • 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 (7,700 followers) • LinkedIn: www.linkedin.com/in/loracecere (100,000 followers) • LinkedIn Influencer: www.linkedin.com/today/author/446631
Editor's Notes
- Big Hairy Audacious Goals Business goals/ challenges: Scale the business Increase the number of machines in operation from 900 to 3,000 by 2016 Expand internationally Essentially we had to justify Whitbread’s £60 million acquisition! While transforming the Supply Chain Replace legacy spreadsheet system with new IT system: The legacy system could not pull in data from the coffee stations’ telemetry systems, so all this valuable data was going to waste Our ‘brand guardians’ were effectively spending all their time poring over spreadsheets and manually replenishing stock These processes were not scalable in line with our ambitions We needed to transform other aspects of our supply chain and grow at the same time! Change logistics / warehousing partner Move to direct purchasing Solution ToolsGroup is at the heart of our successful supply chain transformation: System access our telemetry data tap into our machine telemetry data and uses it to calculate replenishment orders for partner sites. The data is used to forecast demand and optimise inventory levels Some of the results (walk through the four figures on the left of the slide): Also point out the new role of Brand Excellence Advisor And we far exceeded our business goals!: Blew away target to have 3,000 machines in place by 2016. We achieved this target in 2013, a full three years ahead of schedule! Moving into new markets – Poland, Ireland and Dubai Launched new CEM-200 "intelligent" coffee station concession Next steps (only if there is time)
- Big Hairy Audacious Goals Business goals/ challenges: Scale the business Increase the number of machines in operation from 900 to 3,000 by 2016 Expand internationally Essentially we had to justify Whitbread’s £60 million acquisition! While transforming the Supply Chain Replace legacy spreadsheet system with new IT system: The legacy system could not pull in data from the coffee stations’ telemetry systems, so all this valuable data was going to waste Our ‘brand guardians’ were effectively spending all their time poring over spreadsheets and manually replenishing stock These processes were not scalable in line with our ambitions We needed to transform other aspects of our supply chain and grow at the same time! Change logistics / warehousing partner Move to direct purchasing Solution ToolsGroup is at the heart of our successful supply chain transformation: System access our telemetry data tap into our machine telemetry data and uses it to calculate replenishment orders for partner sites. The data is used to forecast demand and optimise inventory levels Some of the results (walk through the four figures on the left of the slide): Also point out the new role of Brand Excellence Advisor And we far exceeded our business goals!: Blew away target to have 3,000 machines in place by 2016. We achieved this target in 2013, a full three years ahead of schedule! Moving into new markets – Poland, Ireland and Dubai Launched new CEM-200 "intelligent" coffee station concession Next steps (only if there is time)
- Synchronize/organize all comments/complains into one voice
- Big Hairy Audacious Goals Business goals/ challenges: Scale the business Increase the number of machines in operation from 900 to 3,000 by 2016 Expand internationally Essentially we had to justify Whitbread’s £60 million acquisition! While transforming the Supply Chain Replace legacy spreadsheet system with new IT system: The legacy system could not pull in data from the coffee stations’ telemetry systems, so all this valuable data was going to waste Our ‘brand guardians’ were effectively spending all their time poring over spreadsheets and manually replenishing stock These processes were not scalable in line with our ambitions We needed to transform other aspects of our supply chain and grow at the same time! Change logistics / warehousing partner Move to direct purchasing Solution ToolsGroup is at the heart of our successful supply chain transformation: System access our telemetry data tap into our machine telemetry data and uses it to calculate replenishment orders for partner sites. The data is used to forecast demand and optimise inventory levels Some of the results (walk through the four figures on the left of the slide): Also point out the new role of Brand Excellence Advisor And we far exceeded our business goals!: Blew away target to have 3,000 machines in place by 2016. We achieved this target in 2013, a full three years ahead of schedule! Moving into new markets – Poland, Ireland and Dubai Launched new CEM-200 "intelligent" coffee station concession Next steps (only if there is time)
- Synchronize/organize all comments/complains into one voice