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The Boundaryless Value-Chain
The document discusses the evolution of logistics and supply chain management from isolated applications to more integrated systems. It describes how planning and execution used to be separate but are now joined up through composite applications. Tomorrow, planning will be more distributed, dynamic and optimized in real-time through increased automation. Two big ongoing challenges are data quality issues and supporting planners amid rapidly changing business environments. The future involves more distributed, adaptive operations through dynamic business webs that can quickly position inventory and leverage different transportation options.
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The Boundaryless Value-Chain
- 1. The Boundaryless Value-Chain Peter Evans-Greenwood Chief Technology Officer
- 2. A roadmap… Yesterday: massbased Today: just in time Tomorrow: dynamic • More is better • On-time is better • Agile is better • Mountains of stuff • Inventory is reduced • Virtual supply chains measured in days of to a minimum and • Inventory dynamically supply kept moving positioned • Mass begets mass • Works great, except • Distributed, adaptive and slows everything when it doesn't operations down • Metric: Velocity • Metric: Acceleration • Metric: Mass © 2009 Unico – All rights reserved 2
- 3. Yesterday: isolated applications Planning Planning Execution Execution • Separate planning and execution systems • Logistics planning is actually production planning • Users forced to deal with business exceptions • Identify root cause • Resolve exception • Manually update production plan © 2009 Unico – All rights reserved 3
- 4. Yesterday: isolated applications Planning Planning Iron Mountain • 1991: Persian Gulf Execution Execution • • Out of 50,000 containers, Separate planning and execution systems 22,000 became ―invisible‖ • Logistics planning is actually production planning • Users forced to deal with business exceptions • Identify root cause • Resolve exception • Manually update production plan © 2009 Unico – All rights reserved 4
- 5. The heritage ofan application centric approach • Focused on delivering major IT assets • Historically, the only economically sensible UI approach to IT • We‘ve been through a few Logic generations of technology • Main frame Data • Client-Server • Thin Client (Internet) We were worried about solving the big problems, but not how these problems were connected © 2009 Unico – All rights reserved 5
- 6. We‘ve come along way since then U.S. software sales in billions of dollars Source: INPUT The Past Yesterday Now WS-* OASIS SOA Reference Model OASIS SOA Blueprints WS-I founded SAP Netweaver SAP WS Oracle Fusion J2ME Web Services JAX-WS ESB MS Indigo BPEL BizTalk 2004 Apache Axis Oracle BPEL JAX-RPC WBI-SF Apache SOAP Oracle WS WS-Policy and WS-Security MS SOAP Sun WS IBM Web Services WS (J2EE & .NET) WS-* starts exploding SOAP 1.0 1999 2000 2001 2002 2003 2004 2005 A standards development timeline © 2009 Unico – All rights reserved 6
- 7. Now we worryabout end-to-end processes • The challenge has moved • From delivering more functionality… • … to effectively End-to-End Processes leveraging the applications we have End-to-End Processes • Now we‘re focused on • End-to-end processes Application Silo Application Silo Application Silo • Supporting users The gaps between applications are becoming more important that the applications themselves © 2009 Unico – All rights reserved 7
- 8. Today: joined-up logistics Composite Composite Planning Planning Application Application Execution Execution • Explicitly connect planning to operations • Provide users with a single consolidated view of logistics functionality • Simplify identifying and correcting business exceptions © 2009 Unico – All rights reserved 8
- 9. Today: joined-up logistics LEAN Composite Composite Planning Planning • Small, off site, warehouses Application Application withExecution or days of stock hours Execution • Explicitly connect planning to operations • Provide users with a single consolidated view of logistics functionality • Simplify identifying and correcting business exceptions © 2009 Unico – All rights reserved 9
- 10. Our focus isfilling gaps & extending our reach UI UI UI UI UI UI UI UI UI Process & Information Integration Application Services Application Services Application Services Platforms Platform Platform Field Operations Back Office Partners & Customers Mobility Composite Applications & Partner Integration • Extending the reach of our Mash-ups • Sales and operational data back office • Enable end-to-end processes • Responsibility for end-to-end • Providing field workers with • Lower error rates business processes joined-up IT support • Increased throughput • Facilities and other assets Sensor Networks • Lower user workload Customer Integration • No more swivel-chair integration • Self-service • Leverage technologies such • Provides the right data, at the as RFID and smart • More timely information right time, presented to enable appliances to instrument users to make better decisions • Reduce swivel-chair operations integration © 2009 Unico – All rights reserved 10
- 11. But this isonly a consolidation of functionality Benefits Limitations • Enables end-to-end • Focused on removing processes negative-value • Lowers error rates • Created by application • Increases throughput silos • Lowers user workload • Does not deliver new • No more swivel-chair functionality integration • Provides the right data, at the right time, presented to enable users to make better decisions © 2009 Unico – All rights reserved 11
- 12. … which iscreating a boundaryless environment The old definitions of inside and outside the business are beginning to make little sense © 2009 Unico – All rights reserved 12
- 13. … which iscreating a boundaryless environment Target Home Depot Amazon • Handed most of their • Stepped around the • Unlocking their supply chain to suppliers barrier of supply chain enterprise functionality • Now considered the completely and providing it as an most efficient supply • Vendors directly online service chain in the US responsible for stocking, • Latest installment is store layout and pricing Amazon Fulfillment • Provide vendors with a • Allows you to forward direct feed on sales deploy stock into • Significantly reduced Amazon facilities operating costs • Dispatch on demand • Greatly increased sales per SKU The old definitions of inside and outside the business are beginning to make little sense © 2009 Unico – All rights reserved 13
- 14. Our two biggestchallenges Data Quality Supporting Our Planners Information that is: • Stuck between silod solutions • Incomplete and incomplete information • Inconsistent • Faced with a rapidly • Uncertain changing business • Dead environment • Not enough time to make good decisions The emerging environment is only making this worse © 2009 Unico – All rights reserved 14
- 15. Tomorrow: distributed, real-timeplanning Automation Automation Optimization Optimization Composite Composite Planning Planning Application Application Execution Execution • Automate day-to-day exception management • Users move to a supervisory/process-improvement role • Leverage benefits of technology to optimize the logistics management • Move from locally acceptable solutions… • …to globally optimal solutions © 2009 Unico – All rights reserved 15
- 16. Tomorrow: distributed, real-timeplanning Automation Automation Optimization Optimization Agile Planning • Inventory Composite Planning Composite Application Application dynamically positioned Execution Execution • Delivery ―at themanagement • Automate day-to-day exception moment‖ • Users move to a supervisory/process-improvement role • Leverage benefits of technology to optimize the logistics management • Move from locally acceptable solutions… • …to globally optimal solutions © 2009 Unico – All rights reserved 16
- 17. Three strategies thatmight help Supporting stakeholders Better information Buying time Steal an idea from Extend out data Create more space Web 2.0 and models and time for users mashups • Look beyond master • Capture and • Stop thinking about data automate the easy applications • Build a model of the 80% of exceptions • Start thinking about data we‗d like to use • Let the users focus creating spaces to to make decisions on the hard 20% support the decision • Leverage external making process information sources • Actively integrate data into the model © 2009 Unico – All rights reserved 17
- 18. 1. Supporting stakeholders From siloed applications... ... to productive planning spaces Case Integrating applications and collaboration Case Client Work er Client Case Worker Case Team Partner Team Partner Leverage Web 2.0 & mashups to create a more productive environment
- 19. 1. Supporting stakeholders Client details from CRM Client Name Contact Address Workflow 12 sad asldrk aslkdja lsdkj al skdjas the client Duis autem vel eum iriure dolor in hendrerit in status vulputate velit esse molestie consequat, vel RSS illum dolore eu feugiat nulla facilisis at status Shipment Shipment Status information Image from Basldjk 8 asd 8 asd 8 external asd 8 asd 8 asd 8 GIS asd 8 asd 8 asd 8 Status Status Lorem ipsum dolor sit amet, consectetuer adipiscing elit, sed diam Notes from client nonummy nibh euismod tincidunt ut laoreet dolore magna aliquam wiki page erat volutpat. Ut wisi enim ad minim veniam, quis nostrud exerci Markup a la Shipment status Mojito Status Status comment Asldkjalsj asldj asldas l Basldjk 8 asd Aklsd aksdh kashd Date, Time, Posted by BLAH Asd 8 asd Status blog Tags, tags, tags, … Add Click through to connected spaces Tags for semantic search
- 20. 2. Create betterinformation Data Information Knowledge Data we have, or that Trends we‗ve noticed Making connections wecan get • Business intelligence • Connecting a pick-up • Plans • Our partners‗ to a passing truck • Transactional data performance • Connecting a news • Operational data • Our customers report to a potential • Public data behaviour disruption • Data scrapped from • Observations of how • Connecting our prices competitive sources our competitors to signals from the operate market • ... • ... • ...
- 21. 2. Create betterinformation Let‘s steal an idea from flexible manufacturing A bike consists of Handlebars Frame Seat a frame, two wheels, handlebars, a seat, drive train, Front Wheel Back Wheel and each wheel has a tyre. We also offer three types of bike: mountain, racing and hybrid Drive Train … and build a planning component model © 2009 Unico – All rights reserved 21
- 22. 2. Create betterinformation Let‘s steal an idea from flexible manufacturing Business Rules A bike consists of • Recognising Concepts situations Handlebars Frame Seat a frame, two • Drivers wheels, • Deciding on • Events handlebars, a actions Assumptions • Plans seat, drive train, Front Wheel Back Wheel and... • Simplifying our • each wheel Predictions understanding has a tyre. We also offer three • Material prices types of bike: • Competitor mountain, racing prices and hybrid • Events Drive Train • ... … and build a planning component model © 2009 Unico – All rights reserved 22
- 23. 3. Buying time Agents Planning Role Based Agents & Mashup Automation Business Webs Human users Other Data Planning Sources Model Clerks Composite Composite Solutions Planning Application Workflow tools Scripting languages Business Transactions Execution Service Wrapped Legacy Applications 3rd party applications Network services Automate the easy 80%, letting people focus on the hard 20%
- 24. 3. Buying time • We need to support the richness of human Agents deliberation Planning Role Based Agents & Mashup • non-linear Automation Business Webs • trial-and-error Human users Other Data • Conventional enterprise technologies are not Planning Sources Model up to the challenge Clerks • Java, C# etc are too focused on technical Composite Solutions Composite Planning concerns Application Workflow tools • BPM & rules engines cannot easily Scripting languages support the conflicting rules and business Business Transactions Execution exceptions Service Wrapped • We need to pull in new ideas and concepts Applications Legacy 3rd party applications • Adding a layer to our conventional Network services enterprise toolkit Automate the easy 80%, letting people focus on the hard 20%
- 25. The future: dynamicbusiness webs Monitoring Generate Identify & Auditing Demand Sources 3PL 3PL 3PL 3PL 4PL Deliver Select Marketplace Material Provider 3PL Identify Sources Select Provider Deliver Materiel Traditional •Static default source • Next unit up chain • Only from local units Boundaryless • Search all providers • Select ―best‖ based on • Dynamic positioning • All units can supply and readiness within supply chain consume • Different and larger transport mix required
- 26. Where is thisleading? Enterprise Applications Logistics Yesterday • Applications are silos • Logistics managed by production • Users mediate between planning applications • Manual exception management • Massive inventory used as a hedge against uncertainty • Months – weeks Today • Joined-up systems • Just-in-time delivery • Users focused on the task • Prediction and static optimization at hand • Some support for exception management • Weeks – days Tomorrow • Online, real-time, planning • Elimination of DCs& creation of the • Users focused on tuning moving warehouse and innovation • 4PLs and dynamic supply chain formation • Days – now
- 27. Conclusions Organisational Knowledge is key The end game is boundaries mean little if we want to move on fulfillment network • Organisational boundaries • Focus on creating the right • Elimination of DCs are being eroded to create environment for our users • Creation of moving a boundaryless • Tacit knowledge warehouse environment • Collaboration • Dynamic, virtual supply • We now have: • Extend our data models chains • Visibility across the beyond traditional • Moving our stakeholders value-chain transactional data to include • from operational roles... • Influence across the other planning drivers, • ... to process value-chain business rules and improvement and • Less responsibility assumptions optimisation roles • Today, our biggest asset— • Capture the easy 80% of our people—is holding us decisions, allowing our back stakeholders to focus on the hard 20%
- 28. © 2009 Unico– All rights reserved