insight2014 orchestrating customer_activated_supply_chain_6913

Orchestrating a Customer-Activated Supply Chain

Session # 6913B

Presenters: Dave Lubowe and Dan Carrell

Date: October 27th 2014

© 2014 IBM Corporation

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Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon many factors, including considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve results similar to those stated here.

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3

2013CSCO

44%

33%

We compared outperformer responses against all other CSCOs and have highlighted key differences

Source: IBM IBV CSCO Insights Study 2014; Question E4, and E5

� In this study we focus on common performance factors, while highlighting the most significant differences between outperformers and all other CSCOs

� Outperforming enterprises surpass their industry peers in terms of revenue growth and profitability, in the opinion of the CxO concerned

Three performance categories Particular attention on Outperformers

Peer PerformersAll other performance combinations

OutperformersHigher revenue growth andprofitability

UnderperformersLower revenuegrowth and profitability

23%

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29%

All other CSCOs

43%

Outperformers

Outperforming enterprises invest more in activities that lead to a customer-activated supply chain

54%

All other CSCOs

Invest in supply chain visibility

[next 3 years]

Collaborative business intelligence

[already have]

73%

Outperformers21%

All other CSCOs

42%

Outperformers

Customer understanding[today]

Areas where outperformers excel

100%35%more more 48%

more

Source: IBM IBV CSCO Insights Study 2014; Question CSCO10c, Question CSCO9c, Question C1

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CSCOs intend to use advanced analytics and modeling tools to predict demand and make better decisions

Sharpen visibility and insight

Integration and visibility

Synchronize entire supply chain

Optimize every element for rapid market response

Business intelligence

Adopt advanced analytics and modeling tools

Use real-time data to predict demand

Path towards a customer-activated supply chain

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Clients are investing in solutions for visibility and business intelligence

A mining company uses analytics to improve asset performance and predict $3B of extra profit

Car manufacturerdevelops a “Battery Traceability System” to predict and improve hybrid and EV battery performance

Water Utility, integrates mobile workforce management solution with existing processes to provide real time two-way communication and access to inventory management for stock counts

Predictive Asset Performance

Predictive Maintenance

Mobile Workforce Management

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The ISC is undergoing an analytics led, technology-enabled supply chain transformation

Globally Integrated Enterprise Smarter Supply Chain

� Enterprise efficiencies

� Streamlined Global processes

� Information sharing

�Advanced Analytics, Optimization, Big Data Management

� Supply Chain Transparancy

�Multi-enterprise supply chain transformation

Evolving Supply Chain Management from cost center to value center…

New Era Supply Chain Reinvention

� Watson Enabled analytics

� Network Orchestration

� Agile / Resilient

� Visibility / Transparency

� Data Driven /Digitally Executed

Business Impact

� 2013 Cash Collected : $99B

� 2013 Managed Spend : $53B

� >20K Employees in 70 countries

� $7B in procurement saving annually

� 18K+ suppliers connected online

� >96% of invoices are electronic

� 32 Smarter Analytics projects

�Over 3.9M visits to eTools

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DescriptiveGet in touch with reality, a single

source of the truth, visibility

PredictiveUnderstand the most likely future

scenario, and its business implications

PrescriptiveCollaborate for maximum business

value, informed by advanced analytics

What happened?

What will happen?

What should we do about it?

Volume - data at rest

Velocity - data in motion

Variety - many forms of data

Veracity - data in doubt

IBM relies on several types of supply chain analytics to leverage Big Data

CognitiveDeeply analytical computing systems that

learn & interact naturally with people

How do we optimize?

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Critical Parts Management (CPMT)

� Upstream multi-tier visibility

� Predictive analytics

� Supply assurance

� Optimized price for maximum gross profit

� Financial evaluation, simulation and win probabilities of multiple price points

IBM Price Analysis Tool (IPAT)

IBM Buy Analysis Tool (IBAT)

�Predictive analytics

�Collaboration platform & data model

�Channel collaboration & support processes

�Incentive alignment

Quality Earning Warning System (QEWS)

We have over 30 analytic solutions in use at IBM today, some of which are also available for client use

� Identifies trends up to 6 weeks before SPC

� Predictive quality mgt

� Cost savings

� Brand protection

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Risk Rover

Quality Quasar

Procurement

Prognosticator

The ISC expansion to Watson for development of Smarter SC Analytics with cognitive capabilities

Possible ISC Uses & IBM Showcase opportunities

Investigate ways Watson to can help solve supply chain problems using analysis of unstructured data

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CSCOs will use innovation to apply modern technologies to rapid business model changes

Collaborative planning and execution with partners

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A building materials company transforms by placing the customer at the center of the transaction and charging for customer delivery delays thus reducing fuel costs and increasing deliveries by 68%

Airline, creates first RFID tag based check-in bag drop process reducing check-in time by 75% (premium) and 60% (non-premium)

Communications company, provides differentiated customer service with mobile product, sales, quotes and inventory apps streamlining warehouse operations and inventory tracking

Customer Service & Sales

Process Improvement

Digital Supply Chain

Clients are investing in solutions for collaborative digital strategies

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In a horizontally integrated supply chain we can no longer afford to work in silos; collaboration is essential

Deep understanding of Customers Requirements

Transformation of our Business Process

Real Time Information & Automated Alerts

KnowledgeSharing

Delighted Clients

Analytics

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Intelligent Operations & Resolution Center

IBM

Clients

BusinessPartners

Suppliers

Transparent Supply Chain

� Real time order status visibility and exception alerts

� Transparent Operations Management

Our vision is to create the most transparent supply chain in the world for predictive risk management

Geo spatial & other visualizations

Global Level KPIs with drill downs

Mobile App for alerts

� Improved Visibility – finished good inventory

� Effective Supplier Collaboration

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CSCOs will shift their vision and oversight to eCommerce, the customer experience and business development

Become customer-activated

Customer influence

Collaborate more actively with customers

Incorporate customer input into product/service portfolio

Customer experience

Understand the customer

Shift oversight to the customer experience

Future areas of CSCO personal involvement

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Shoe company, transforms planning and operations using analytics to deliver products to market faster and make impactful real-world decisions based upon real time customer order and preference data

Food distributor, initiates enterprise resource-planning program with modeling to synchronize diverse product data to maximize sales and more accurately forecast supply and demand at the product group and store level

Bank, integrates 360 degree customer view for prescriptive insights and to reduce time to market of new customized products and services designed around client demand

Clients are investing in solutions for bringing the customer into the supply chain

Supply Chain Planning

Optimal Product Assortments

Customer Service & New Product Design

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ISC Focused on …Delighting Clients Every Day

Dedication to every Client’s success

Client Collaboration Community

Sharing Knowledge and Experience for Client Benefit

Ensure all client facing initiatives & tools of engagement anticipate and address client needs.

• Collaboration community

Structured “Voice of the Client” initiatives help to gather and understand client requirements that in turn drive strategic transformational projects.

• Leveraging social, mobile, and cloud

Showcase IBM use of advanced analytics solutions in a real supply chain environment to drive client value

• Highlight tangible business benefits and demonstrate the art of the possible

“Put the client first.”

“Listen for need, envision the

future.”

“Share expertise.”

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Supply Chain Transparency

Global Supply Chain Transformation

Advanced Analytics, Optimization, Cognitive

Predictive Risk & Quality Management

IBM ISC supply chain network 2020 vision

Multi-enterprise, collaborative, end-to-end intelligence focused on client value

1919




35% more Outperformers invest in supply chain visibility

Future state: Managing supply chain complexity requires superb business intelligence and insights





100% more Outperformers invest in collaborative business intelligence

Future state: Innovation will apply modern technologies to rapid business model changes

Partner for innovation

Collaborative execution

Increase level of partnership

Use collaborative digital strategies

Innovative initiatives

Treat risk mitigation as integral part of CSCO;s job

Create agile, social networks

48% more Outperformers invest in customer understanding

Future state: Personal involvement in eCommerceand customer experience management


Customer influence



Customer experience



Assembling the pieces of a customer-activated supply chain involves activities on three dimensions

2020




35% more Outperformers invest in supply chain visibility

Future state: Managing supply chain complexity requires superb business intelligence and insights





100% more Outperformers invest in collaborative business intelligence

Future state: Innovation will apply modern technologies to rapid business model changes

Partner for innovation

Collaborative execution

Increase level of partnership

Use collaborative digital strategies

Innovative initiatives

Treat risk mitigation as integral part of CSCO;s job

Create agile, social networks

48% more Outperformers invest in customer understanding

Future state: Personal involvement in eCommerceand customer experience management


Customer influence



Customer experience



Where are you?

Path to a customer-activated supply chain

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Dave LuboweGlobal Business ServicesVP & Partner, Operations & Supply Chain ConsultingE-mail:[email protected]

Dan CarrellIBM Integrated Supply Chain VP, Client Services Procurement E-mail: [email protected]

Acknowledgements and Disclaimers

Availability. References in this presentation to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates.

The workshops, sessions and materials have been prepared by IBM or the session speakers and reflect their own views. They are provided for informational purposes only, and are neither intended to, nor shall have the effect of being, legal or other guidance or advice to any participant. While efforts were made to verify the completeness and accuracy of the information contained in this presentation, it is provided AS-IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this presentation or any other materials. Nothing contained in this presentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software.

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