„SUPPLY CHAIN MANAGEMENT IN TURBULENTEN ZEITEN“...sustainability Using data and AI to drive a...
Transcript of „SUPPLY CHAIN MANAGEMENT IN TURBULENTEN ZEITEN“...sustainability Using data and AI to drive a...
WIR SIND INDUSTRIE
„SUPPLY CHAIN MANAGEMENT IN
TURBULENTEN ZEITEN“Mag. Thomas Pühringer, PwC
DI (FH) Markus Strobl, sparte.industrie
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PwC
Connected and autonomous supply chain ecosystems2025
PwCPwC
In this year’s global study we take a look at how Digital Champions have achieved Supply Chain excellence
Digital Supply Chain Study 2020 April 2020
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The study looks at how leading companies have achieved Supply Chain excellence through
customer centric and autonomous supply chains using smart technologies and solutions
What are the key
characteristics of a next
level supply chain and
which capabilities are
required to achieve it?
In which technologies are
Digital Champions
investing and what does a
state of the art supply chain
technology and IT
architecture look like?
Which benefits and
performance
improvements can be
realised through investing in
supply chain excellence?
What are the implications on
the supply chain
organisation, skills and
ways of working?
PwCPwC
For our Global Digital Supply Chain Study, we interviewed
>1,600 companies in 7 industries
Digital Supply Chain Study 2020 April 2020
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33 countries(6 regions)
Sample size1,601 respondents
Targetcompanies7 key industrial sectors
Survey methodsComputer-assisted telephone interviews,
with PwC online interviews
Survey participantsC-Level and 2nd line management
Study datesOctober 2019 to January
2020
Engineering and
construction
Engineering
Construction
Process
industries
Chemicals
Paper and
packaging
Metals and
mining (materials)
Pharma and
medtech
Pharma-
ceuticals and
life sciences
Medtech
Automotive
Automotive
OEM
Automotive
suppliers
Electronics
Semiconductors
Business
electronics
equipment
Consumer
electronics
Retail and
consumer goods
Food and beverage
Retail
FMCG
Industrial
manufacturing
Industrial
machinery
Metal products
Aerospace and
defense
PwC
PwCPwC
The survey sample consists of 7 industry sectors
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Industrial
manufacturing19.9%
Automotive 15.4%
Retail and consumer
goods15.0%
Pharma and
medtech
14.7%
Electronics 14.6%
Process
industries14.5%
Engineering and
construction5.9%
At least 140 interviews
per major sector, which
include 18 subsectors
Q3. Which industry sector best represents your company? Base: 1,601 companies
PwC
More than 33 countries across the globe participated in this year’s study
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This PwC report is based on quantitative research consisting of interviews conducted between October 2019 and January
2020 with 1,601 senior executives from companies in 33 countries across EMEA, the Americas and APAC. Global survey
results were weighted by country GDP to provide a balanced view.
• Australia
• Austria
• Bangladesh
• Belgium
• Brazil
• Canada
• China
• Denmark
• Finland
• France
• Germany
• India
• Indonesia
• Italy
• Japan
• Mexico
• Middle East*
• Netherlands
• Poland
• Portugal
• Singapore
• South Africa
• Spain
• Sweden
• Switzerland
• Turkey
• UK
• USA
* Multiple countries included
PwCPwC
Digital Supply Chain maturity index methodology
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Distinct survey approach
Survey questions designed with
carefully selected factors.
You can’t do everything
For each index dimension, at least 80% of all
possible activities must be implemented in
order to reach a full score.
Clear index construction
0–100-point range.
Cumulative index
The more integrated a business and more
broadly it implements advanced supply chain
capabilities, the higher the index value.
I
F
N
C 75-100 Digital SC Champions
50-74 Digital SC Innovators
25-49 Digital SC Followers
0-24 Digital SC Novices
Point range
Digital SC
Champions
9%
Digital SC
Novices
8%
Digital SC
Innovators
40%
Digital SC
Followers
43%
Supply chain maturity levelsApproach
Implementation of advanced supply
chain capabilities max 25 pts. (Q9b)
Implementation of advanced
software solutionsmax 25 pts. (Q13)
Overall performance impacts max 15 pts. (Q9c)
Demonstrated
revenue impacts max 10 pts. (Q19)
Digital Supply Chain Maturity Index = 100 pts.
Implementation of AI max 10 pts. (Q9d)
Demonstrated
cost impacts max 15 pts. (Q19)
PwC
Quantitative research has been complemented by in-depth interviews with leading companies
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Connecting local and
global supply chain
experts from different
functions to drive
innovation and
sustainability
Using data and AI to
drive a connected
supply chain and
better customer
experience
Building up a
conscious supply
chain ecosystem
(incl. factory,
warehouse and
distribution)
Making the vision of
an autonomous
supply network a
reality
Living the connected
enterprise --
integrating suppliers
and customers
Driving innovative
business models
through
next-level supply
chains
PwC
PwC
Digital Champions in 2025: Successful in connected and autonomous supply chain ecosystems
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The visionTomorrow's supply chains will be connected and self-
orchestrated ecosystems: >80% of Digital Champions
describe their supply chain focus as external integration
or end-to-end orchestration
Operating model developmentMastering tomorrow’s supply chain challenges through
the next level supply chain organisation and capabilities:
To excel in a constantly changing environment, companies
need to develop a flexible organisation with a digitally
empowered and upskilled workforce
Closed loop and integrated planningNext-level planning is synchronised real-time with execution, integrates
supply chain partners and enables continuous optimisation: 72% of
Digital Champions have implemented end-to-end supply chain planning; they
are also taking the next step towards closed-loop planning
Smart logistics flows Smart logistics is the key savings driver and a growth lever in the
connected supply chain ecosystem: Digital Champions rate smart logistics
as their top supply chain priority. Smart logistics account for more than 50% of
overall supply chain cost savings
The benefitsInvestments into supply chain
excellence pay off: Digital Champions
achieved savings of 6.8% p.a. in supply
chain costs, along with a 7.7% revenue
increase
AI in supply chain managementArtificial intelligence is accelerating
supply chain improvements and will
become the new norm: Digital Champions
have clearly identified the areas where AI
brings value and use AI 2-3 times more
extensively than Digital Novices
Supply chain transparency and
sustainability Supply chain transparency sets the stage and is a
catalyst for greater sustainability: >50% of Digital
Champions say that supply chain transparency is a high or
top priority
Dynamic supply chain segmentation Dynamic supply chain segmentation enhances
customer centricity and continuously balances service
levels, costs and margins: 73% of Digital Champions
have already implemented segmentation and report a
strong positive impact on their business
Digital
Champions in
2025: Successful
in connectedand
autonomous supply
chain ecosystems
PwC
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The vision
Tomorrow’s supply chains will be connected and self orchestratedecosystems
PwC
Our vision of a connected and autonomous supply chain ecosystem
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Future supply chain operating model
Financial and payment flows
Supply chain
transparency and
sustainability
Dynamic supply chain
segmentation
Closed loop integrated
planning and execution
Smart logistics
flows
Artificial intelligence
Connected and autonomous
supply chain ecosystem
Physical flow Informationflow
B2B &B2C
Distribution
Customer
Manufacturer
Supplier (tier1,2,3)
PwC
Supply chain integration maturity
Leading companies go beyond functional efficiency towards an end-to-end orchestrated supply chain ecosystem
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• End-to-end orchestration is
autonomous, data driven, highly
automated
• External collaboration extends
beyond company walls and
includes both suppliers and
customer networks
• Internal integration overcomes
functional silos within the
company and secures cross-
functional collaboration
• Functional efficiency
focuses on the improvement
of each function and their
related KPIs
Q8. Which statement best describes your supply chain today?
Moving from linear supply chains to networked ecosystems
Achieved functional efficiency or
internal integration
Achieved external integration
or end-to-end orchestration
2% 19%
62%
36%
81%
0%
Still working in silos
All Companies Digital Champions
PwC
Winning capabilities enable the set up of the future supply chain ecosystem
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Winning capabilities of the future supply chain ecosystem
Supply chain transparency and sustainability: Multilevel data flow and
seamless connection of all data across the supply chain covering product 360°,
supply chain 360°, customer 360°, finance 360°, a fully transparent and
sustainable supply chain, reusing materials and extending the life cycle of
finished products and services, integration of suppliers and other partners
Closed loop integrated planning and execution: End-to-end planning from
customers to sub-suppliers covering short and longer term time horizons and
integrating financial and volume plans, continuous balancing of demand and
supply, direct connection to execution activities, collaborative workflows and
automated decision-making through advanced analytics
Smart logistics flow: Multimodal inbound and outbound transportation,
automated warehouses, effective transportation management systems and
warehouse management systems, optimised and dynamic distribution
footprints, omni-channel order management, B2B2C/ B2C delivery models
Dynamic supply chain segmentation: Established segmentation strategies
and execution options to support key business requirements, which analyse
consequences on the parameters service, margin, cost and inventory. Makes
supply chains flexible enough to be segmented again for each customer order,
as well as reconfigurable in response to market conditions and product specifics
Artificial intelligence, building on advanced data analytics:
Leveraging fully connected data networks and AI along the supply
chain to provide improved demand forecasts through demand
sensing. Detecting patterns based on the use of machine learning
within the supply chain and triggering appropriate measures in
response, which ultimately enables a fully autonomous supply
chain and effective optimisation decisions
Key enabler
Mastering tomorrow’s challenges through next- level supply
chain organisations and capabilities: To make the future
supply chain ecosystem a reality, and overcoming the hurdles
that arise along the way, will mean making substantial changes -
especially in employee mind-set, true transformation upskilling
and innovative processes and ways of working.
Making it happen
PwC
PwC
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The benefits
Investments into supplychain excellence pay off
PwC
Benefits from investments into advanced supply chain capabilities last year
Investments into advanced supply chain capabilities pay off and supply chain has become a significant value contributor
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Q19. What revenue and cost benefits did you gain last year from your investments in advanced supply chain capabilities? Base: 1,601 companies
~8%Additional revenue fromSC investments reached7,7% during the last financial year.
~7%Digital Championsachieved significant savings of 6.8% on supply chain costs in the last financial year.
Where are new revenues coming from? We
see investments into supply chain resulting
in new business models, new customer
channels with higher customer centricity,
as well as faster delivery capabilities –
leading to additional product and service
revenues.
Digital Champions have achieved
significantly greater cost reductions
relative to their overall supply chain costs in
the last financial year due to their
investments. Compared to Digital Novices,
the cost benefits achieved by Digital
Champions are twice as high.
Re
ve
nu
eb
en
efi
tsC
os
tb
en
efi
ts
7.7%6.3%
3.6%
3.3%
5.9%6.8%
>2X
>2X
All Companies Digital ChampionsDigital Novices
PwC
Payback period (in years) by industry sector
The average payback period of investments into supply chain capabilities is less than 2 years
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1.8The payback period (inyears) of investing into advanced supply chain capabilities is on average less than twoyears.
Payback period (in years) by region
1.9
1.6
1.8
3.0
1.3
1.7
2.2
1.9
Average
Process
Manufacturing
Pharma
Retail/consumer
Electronics
Automotive
Engineering
1.3 APAC
2.0 EMEA
2.3 AMERICAS
PwC
Investments into advanced supply chain capabilities as % of total supply chain costs
Companies will continue to heavily invest in building up advanced supply chain capabilities
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Q17. How much did your company invest in advanced supply chain capabilities, including costs for people, process, data and IT/technology, as a percentage of your
total supply chain costs last year, and how much do you expect to spend in five years (FY2024/25)? Base: 1,601 companies
>9%Digital Champions will
continue to invest more
than 9% of their supply
chain costs to further
strengthen their supply
chain capabilities.
All Companies Digital ChampionsDigital Novices
7.4
%
9.1%7.9%
In 5 years
Last year 4.5%
11.8%10.8%
Digital Champions
invested twice as much
as Digital Novices into
building their supply chain
capabilities last year,
including enhancements to
both physical and digital
infrastructure and people-
related expenses.
PwC
Investments into advanced supply chain capabilities also boost supply chain performance
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All Companies Digital ChampionsDigital Novices
13 turnsDigital Champions have
automated and streamlined their
supply chain. 82% achieve >12
inventory turns p.a., versus only
30% of Digital Novices.
93%Digital Champions achieve 93%
OTIF due to better supply chain
transparency, data management
and dynamic forecasting.
Average inventory turns performance (#)
Last year
82% of Digital Champions report >12 inventory turns annually,
while only around a third of Digital Novices achieve that level of
performance. Their focus is on lead time and throughput
optimisation via automation and smart processes.
Among regions, EMEA is the clear laggard: 51% of firms report
12 turns or better, against 76% for the Americas and 72% for
APAC.
84% of Digital Champions report >90% on time in full delivery
performance, while only 12% of the Digital Novices achieve that
level; major contributors are better supply chain transparency,
data availability and dynamic forecasting.
Average on time in full (OTIF) performance (%)
Last year
13.212.2
9.7
92.8%87.2%77.9%
Q20. Please provide us with the number of inventory turns your company achieved last year
(FY2018/2019) Base: 1,601 companies
Q21. What level of performance did you achieve last year (FY2018/19) for on time in full
delivery (OTIF) to request? Base: 1,601 companies
PwC
Advanced supply chain capabilities cumulate to significant qualitative and quantitative benefits
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Ben
efi
ts
Digital Novices Digital Followers Digital Innovators Digital Champions
• Improved quality
• Greater market share
• Improved planning and decision making
• Improved employee productivity
• Accelerated time to market
• Improved profitability
• Increased customer satisfaction
• Decreased costs and higher efficiencies
• Improved sustainability and reduced waste
• Effective risk
management
• Better asset
utilisation
• Increased
revenues
OTIF
Inventory turns
Greater cost reductions
Increased revenue
• As companies achieve higher supply chain
maturity, multiple benefits add up to a
higher level of cost efficiency, supply chain
performance and increased product/service
revenue.
• Digital Novices focus on improving general
planning and decision-making, enhancing
quality, and gaining higher market share
against competitors.
• In addition, Digital Champions optimise
their assets, manage supply chain risks
effectively and increase revenue by
realising new business models.
Q18. What are the key benefits that you are gaining from your increased investment in advanced supply chain capabilities? Base: 1,601 companies
PwC
PwC
Investments into advanced supply chain capabilities enable next level supply chains
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Connected and
autonomous
supply chain
ecosystem
From... ...To
Siloed supply chain functionsOrchestrator of end-to-end
connected supply chain ecosystems
Planning not connected end-to-endSynchronised, closed loop,
end-to-end planning
Singular availability of dataOne single data source of truth that
is available to all stakeholders
Backward looking and manual
decision making
Forward looking, data and
AI based decision making
Fixed set of supply chain configurationsDynamic and efficient supply
chain segmentation
Serving traditional business modelsEnabling innovative business models
and accessing new customer channels
Gradual, low range cost improvementsStep change in service levels, costs
and flexibility
PwC
PwC
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Key capabilities
Supply chain transparency sets the stage and is a catalyst for greatersustainability
PwC
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Supply chain transparency makes it possible for companies to track what is actually happening across the supply chainecosystem
360° supply chain data network capturing supply chain
data and their relationships end-to-end
Near real-time track and trace including dynamic
ETAs and proactive alerting
End-to-end traceability and chain of custody of products
End-to-end supply chain visibility (e.g.
inventory, capacity, planning)
Cost-to-serve visibility down to transactional level
Smart and AI enabled control tower enabling end-to-end
collaboration, optimisation and automated decisions
Physical flow Informationflow
B2B & B2C
Distribution
Customer
Manufacturer
Supplier (tier1,2,3)
PwC
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Supply chain transparency is a key differentiator of tomorrow’s supply chain ecosystems
55%Of Digital Champions consider
supply chain transparency as
a top priority
More than half of Digital
Champions see supply chain
transparency – from materials to
customers and back – as a highly
important capability of a connected
supply chain ecosystem.
Implementation of supply chain transparency Application of AI in supply chain transparency
Q9b How would you characterise your advanced supplychain capabilities today? (Top 2 box: those
reporting partially to fully implemented) Base: 1,601 companies
Q9d. How would you characterise your advanced supply chain capabilities today? For
which capabilities are you applying AI,ML, or deep learning? Base: 1,601 companies
28%
62%
14%
23%
43%
17%
• Digital Champions have already invested in
gaining transparency of their supply chain
• More than twice as many Champions have
implemented supply chain transparency.
• Digital Champions have understood the benefits
of AI in supply chain transparency
• 4 out of 10 Digital Champions are applying AI to
generate transparency and make better and
more automated decisions.
55%
23%4%
All Companies Digital ChampionsDigital Novices All Companies Digital ChampionsDigital Novices
What are your priorities for implementing each of these capabilities? (Top 2
box: those reporting high / top priority) | Base: 1,601 companies
PwC
Digital Champions are well on their way towards achieving the next level of supply chain transparency – proactive value chain orchestration
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Level of supply chain transparency
Q10. In which areas, if any, do you currently have supply chain transparency? Base: 1,081 companies
Increased sophistication of transparency
• Digital Champions have come almost twice
as far as all companies when it comes to
gaining visibility over their supply chain
• Now it is time to take the next step and
enhance this visibility with intelligence, for
example by enabling proactive alerts and
automated decisions
• Digital Champions have already started to
embark on the journey to implement more
sophisticated elements of supply chain
transparency such as near real-time
visibility of supply chain information through
a control tower (e.g. a “digital twin”) and full
end-to-end supply chain orchestration
using an AI enabled control tower and
automated decision making
All Companies Digital Champions
47%
12%
68%
35%
Product content
visibility
Digital twin of
the supply chain
Financial
visibility
13%
Near real-time
logistics visibility
49%
AI enabled
control tower for
orchestration
84%
36%
62%
2%
PwC
PwC
Scale matters – large companies have greater transparency of their supply chain
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Level of supply chain transparency
Q10. In which areas, if any, do you currently have supply chain transparency? Base: 1, 081 companies (Companies implementing transparency)
Increased sophistication of transparency
• Large firms have more visibility than
small firms
• Far more firms with >$ 5B revenue
have a digital twin of the entire supply
chain
• However, large firms are also just at the
beginning of the journey towards
proactively orchestrating the value
chain through an AI enabled control
tower
Product content
visibility
Near real-time
logistics visibility
19%16%
AI enabled
control tower for
orchestration
28%
Financial
visibility
Digital twin of
the supply chain
16%
72%
56% 54%
2% 0%5%
$100 to $999M >$ 5B
PwC
PwC
Digital Champions focus on integration with customers and suppliers to ensure transparency across the entire supply chain
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Q9b How would you characterise your advanced supplychain capabilities today? (Top 2 box: those reporting partially to fully implemented)
Base: 1,601 companies
All Companies Digital ChampionsDigital Novices
Enabler
One of the key enablers applied by
Champions for integration is Artificial
Intelligence. AI-driven tools make it
possible to dynamically optimise and
configure connections and integration
with customers and suppliers (24%)
One typical area of application for AI is
using an advanced analysis to provide
recommendations for the optimal level
of integration with value chain partners,
covering options from a pure
opportunistic transaction towards full
integration into business processes.
Implementation of customer and supplier integration
33%
59%
6%
Digital Champions put a strong focus on supply chain integration – 55% see integration of their supply chains with
suppliers and customers as a top priority.
• Almost 3 out of 5 Champions
operate their supply chains in
integrated ecosystems with
customers and suppliers.
• More than 50% of Digital
Champions see a very large
impact from advanced
integration
PwC
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Technology is a key enabler to gain supply chain transparency
Technology choices
Q22. What are the biggest challenges your supply chain faces in the next five
years? (Select up to three) Base: 1,601 companies
32%Investing into supply chain transparency
also sets the foundation to get a better
handle on achieving a circular and
sustainable supply chain – which is the top
supply chain challenge for Digital
Champions (32%) over the next 5 years.
72%Technology is a key enabler, Digital
Champions are way ahead in this
race. 72% of Digital Champions
have implemented technologies to
gain transparency across their
supply chain compared to only
13% of Digital Novices.
• When implementing supply chain transparency and control
tower solutions, 87% of Digital Champions and 76% of all
companies rely on standard software solutions – the highest
share of standard solution usage across all supply chain
technologies.
• Almost all Digital Champions (97%) have already made a
technology vendor decision, compared to 84% of all
companies.
• From all companies that already made a decision, 84% work
with SAP, E2open, Infor Nexus, JDA or One Network.
Q13. Are you developing the technologies in-house or do you rely on standard software?
Base: 1,601 companies
PwC
Blockchain is spurring interest, but hasn’t yet gained much traction
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5%of all companies and 27% of
Digital Champions have already
implemented Blockchain
There’s clear interest in exploring the possibilities, especially from Digital Champions
• 70% of Digital Champions have either already begun piloting blockchain solutions (37%) or are planning to do
so within the next five years (33%)
• That compares with around half of companies overall (49%) who are piloting blockchain or expressed interest in
doing so
There’s still a great deal of uncertainty about the best way to pursue such initiatives though
• 64% of companies overall haven’t yet decided whether to develop a solution in-house or purchase standard
software, far more than for any of the other software-based supply chain technologies
• Our experience suggests that for many companies, there are also still challenges involved in developing a
clear business case for blockchain.Q13. Are you developing the technologies in-house or do you rely on standard software? Base: 1,601 companies
PwC
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Continental is on the journey of making the vision of an autonomous supply chain network a reality
Continental Automotive expects to connect all systems, with data stored in the cloud and information
shared in real-time with all relevant users
Decisions will be optimised using big data and artificial intelligence.
Transparency and visibility are an important part of this evolution. That includes real time connectivity
during transport and integration with internal and external business partners.
A Control Tower will autonomously monitor and steer the whole supply network, making it possible for
Continental Automotive to proactively orchestrate its highly complex activities.
Example
Digital twin of the supply chain and using a cloud solution for its material supply flows. Intelligent
algorithms enable the company to quickly and proactively identify whether material supply failures could
cause bottlenecks. Advantages include:
The lead time needed to provide information in the event of possible delivery disruptions is
significantly shortened – from days to hours.
The solution facilitates integrated risk management for component supply and serves as a fully
integrated interface between Continental and its suppliers
PwC
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Key capabilitiesNext-level planning is synchronised in near real-time with execution, integrates value chain partners and enables continuous optimisation
PwC
Next-level planning is synchronised real-time with execution and enables continuous optimisation
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Financial planning (revenue and cost)
Supply chain planning
Product
portfolio
planning
Capacity
planning
Material
requirements
planning
Production
planning
Inventory
and
replenishme
nt planning
Distributio
n planning
Demand
sensing
and
planning
Sales and
marketing
planning
Strategic
Tactical
Operational
• Sales growth and
targets
• Location expansion
plans
• Assortment plan
• Statistical forecast
• Seasonal demand
and promotions
• New products and
phase outs
• Point of sales
data
• Demand sensing
• Alerts and
deviations vs.
plan
Plannin
g
horizon
s
Top down
planning
Bottom up
planning
Manufacturer
Customer
B2B &B2C
Distribution
Supplier
(tier1,2,3)
Execution
PwC
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Digital Champions
are well ahead in
closed loop
integrated planning
and execution -
more than 7 out of
10 are partly or
fully deploying
end-to-end
planning
48%of Digital Champions consider
end-to-end planning as a top
priority
Almost half of the Digital
Champions (48%) rate planning as a
high or even top priority. That’s a
sharp contrast to the sample
overall, where fewer than one out of
every five companies sees end-to-
end planning as a high or top
priority.
Implementation of end-to-end planning Impact from end-to-end planning
Q9b. How would you characterise your advanced supplychain capabilities today? (Top 2 box: those reporting partially
to fully implemented) Base: 1,601 companies
Q9c. How would you characterise your advanced supply chain capabilities today? (Top 2 box:
those reporting large / very large impact) Base: 1,601 companies
All Companies Digital ChampionsDigital Novices All Companies Digital ChampionsDigital Novices
12%
43%
• Digital Champions have taken actions and
enhanced their planning approaches and
maturity.
• More than three times as many Champions
have implemented end-to-end planning
compared to all participants.
• Digital Champions are enjoying significant
benefits from their integrated planning
capabilities. 43% see large / very large positive
impact from end-to-end planning
• Planning maturity pays off for example in
improved volume flexibility
48%
18%2%
72%
21%1%
3%
What are your priorities for implementing each of these capabilities? (Top 2
box: those reporting high / top priority) | Base: 1,601 companies
PwC
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Technology is a key enabler for integrated planning
Technology choices
70%Technology is a key enabler,and
Digital Champions are way
ahead in this race. 70% of Digital
Champions have implemented
technologies to enable their end-
to-end supply chain
planning
When implementing integrated planning
solutions, 83% of Digital Champions and 63%
of all companies rely on standard software
solutions. Almost all Digital Champions (96%)
have already made a technology vendor
decision compared to 73% of all companies.
Of those companies that have already made
a decision, 73% work with SAP, JDA, Kinaxis
or OM Partners
Q13. Are you developing the technologies in-house or do you rely on standard software? Which technology partners are you focusing on?
Base: 1,601 companies
Not Decided Yet
27%
No External Partners
10%
SAP IBP
25%
JDA
11%
OM Partners
6%E2Open
5%
Other
16%
PwC
Digital Supply Chain Study 2020 April 2020
41PwC
Key capabilities Smart logistics is the key savings driver and a growth lever in the connected supply chain ecosystem
PwC
Digital Supply Chain Study 2020 April 2020
44PwC
Smart logistics has
the highest priority
for Digital
Champions and
delivers significant
benefits
59%of Digital Champions consider
smart logistics a top priority
Every second Digital Champions (59%)
rates smart logistics as a top or high
priority capability – more than any
other capability area
Implementation of smart logistics
Q9a,b,c. How would you characterise your advanced supply chain capabilities today? (Top 2 box: those reporting high / top priority, partially to
fully implemented, large / very large impact) Base: 1,601 companies
All Companies Digital ChampionsDigital Novices
• Implementing smart logistics is a non negotiable
move
• 82% of Digital Champions have implemented
smart logistics, giving it the highest
implementation rate of all named capability areas
59%
18%0%
32%
82%
0%
Every fourth Digital
Champions is applying AI to
boost performance in smart
logistics
50% of supply chain cost
savings can be attributed to
smart logistics
What are your priorities for implementing each of these capabilities? (Top 2
box: those reporting high / top priority) | Base: 1,601 companies
PwC
Digital Supply Chain Study 2020 April 2020
45
Scale matters – large companies have a higher degree of implementation when it comes to smart logistics
PwC
Implementation of smart logistics
$ 100 to $
999 million
25%
$ 5 billion +$ 1 billion –
$ 2.99 billion
$ 3 billion –
$ 4.99 billion
18%
29%
42%
Q9b How would you characterise your advanced supply chain capabilities today? (Top 2 box: those reporting partially to fully
implemented) Base: 1,601 companies
Large firms are 2x as likely to have implemented smart
logistics as small firms
>2X
PwC
The right technologies are key for becoming a smart logistics Champion
Digital Supply Chain Study 2020 April 2020
47PwC
Technology
choices
Integration with CRM
systems
Warehouse management
systems (WMS)
Transport management systems (TMS)
and logistics marketplaces
47%
78%
18%
55%
74%
17%
46%
88%
4%
• For TMS, most Digital Champions rely on standard software (71%) while nearly every second Digital
Champion’s WMS is a solution developed in house developed (42%).
• Learnings from the Digital Champions: IT maturity and reliability of master data is among the major
challenges Digital Champions are experiencing along their way.
88%of Digital Champions use Transportation
Management Systems and logistics marketplaces,
but only 4% of Digital Novices do so. There is a
significant “digital gap” between maturity stages
The right technologies are key. In order to implement
next level logistics, Digital Champions excel at
implementing and integrating advanced technologies
in smart logistics
Q13. To what extent have you implemented
the following software-based supply chain
technologies within your company?
Base: 1,601 companies
PwC
Digital Supply Chain Study 2020 April 2020
48PwC
NOKIA is building up a conscious supply chain ecosystem (incl. factory, warehouse and distribution)
NOKIA is creating an end-to-end supply chain ecosystem, by integrating suppliers, carriers and customers
and ensuring end-to-end process visibility and traceability. To develop and continuously enhance the
“Future Eye” vision, a close cooperation among supply chain, R&D, production and sales is key to capture
improvement potentials, validate customer requirements and identify new business opportunities.
Conscious factory: By adding sensors to factories and connecting manufacturing and logistics assets,
Nokia is making it possible to gain visibility of activities in real-time.
Factory-in-a-box is a container-based portable factory line that is highly automated and includes a digital
twin. It can be deployed anywhere around the world and set up in hours.
Conscious warehouse: Communication technology is the backbone for Nokia’s “conscious warehouse”
and makes it possible to connect the entire warehouse with smart devices. A “warehouse-in-a-box”
solution, that will allow companies to flexibly place smaller, digitally enabled warehouses closer to
customers, to support specific country and project needs.
Conscious distribution: Allows real-time shipment monitoring and enables dynamic routing so Nokia can
react faster to changing conditions
PwC
Digital Supply Chain Study 2020 April 2020
49PwC
Key capabilities Dynamic supply chain segmentation enhances customer centricity and continuously balances service levels, costs andmargins
PwC
Digital Supply Chain Study 2020 April 2020
51PwC
Digital Champions have begun to transform their supply chains towards dynamic segments, flexibly tailored to customer needs and individual transactions
• One set of standardised
processes across all
businesses
• “Average fit” to business
requirements with
average service level
Supplier
Supplier 1
Supplier 2
Supplier 3
Supplier 4
Supplier 5
Supplier 6
CustomerSupplier CustomerDeliver DeliverMake MakeSource Source
Static segmentationNo
segmentationDynamic supply chain segmentation
Source 1 Make 1 Deliver 1
Source 2 Make 2 Deliver 2
Source 3 Make 3 Deliver 3
Customer 1
Customer 2
Customer 3
Customer 4
Lean
Agile
Reliable
One size fits all
Responsiveness
Deliv
ery
• Pre-defined set of processes along the supply chain with dominant
archetypes
• Flexible and dynamic combination of pre-sets to supply chain segments
• Best fit supply chain setup for diverse and changing business requirements
PwC
Digital Supply Chain Study 2020 April 2020
52PwC
Dynamic supply chain segmentation is a key capability that helps to boost overall supply chain performance
56%of Digital Champions consider
supply chain segmentation as
a priority
Dynamic supply chain segmentation is a
top priority among all advanced supply
chain capabilities today: across all
companies, every 4th considers supply
chain segmentation capabilities as a top or
high priority for improved supply chain
performance
Implementation of supply chain segmentation
Q9b How would you characterise your advanced supplychain capabilities today? (Top 2 box: partially
to fully implemented) Base: 1,601 companies
56%
24%9%
All Companies Digital ChampionsDigital Novices
3 out of 4 Digital Champions have organised
their supply chain in segments.
40%
73%
13%
• Supply chain segmentation is a key capability for companies that follow a
structured approach to optimising their supply chains and their cost-to-
service proposition. We see a shift from a rather static setup of segments
towards dynamic, configurable setups that flexibly react to customer
and business requirements
• One of the key benefits from supply chain segmentation is dynamic
cost-to-serve optimisation, which 61% of Digital Champions are
successfully implementing.
• In order to harvest these benefits, many Digital Champions rely on AI,
including machine learning (41% vs. 24% of all companies) to
dynamically design and configure supply chain setups
What are your priorities for implementing each of these capabilities? (Top 2
box: those reporting high / top priority) | Base: 1,601 companies
PwC
Successful supply chain segmentation requires an advanced
environment to harness the full range of potential benefits
Digital Supply Chain Study 2020 April 2020
53
Q13. How would you characterise the implementation of the following software-based supply chain technologies today? Base: 1,601 companies
All Companies Digital Champions
64%of Digital Champions
see a large impact
from supply chain
segmentation – they’re
realising more benefits
from supply chain
segmentation than less
mature firms
Digital Champions gain greater benefits from dynamic supply chain segmentation through a well-developed set of supply
chain capabilities
Key differentiators include
47%
36%
Procurement &
supplier platform
Smart warehousing
44%
29%
Automated order management
78%
42%
Integration with CRM
26%
78%
PwC
Digital Supply Chain Study 2020 April 2020
54PwC
TRUMPF is driving innovative business models through next-level supply chainsBack in 2009, TRUMPF began allowing customers to log in online and initiate the production process
digitally. In 2015, the company started inscribing a unique data matrix product code on every part –
similar to a three-dimensional QR code – using TRUMPF’s laser marking machines to make re-ordering
and identification easier. And since 2017, customers have been able to photograph the code with the
TRUMPF service app and place an order simply by uploading the image.
Each order triggers the company’s semi-autonomous production system, which independently determines
the priority of each order and automatically assigns it to the right machine with open capacity – under the
surveillance of the plant employees. These enhancements have significantly improved supply chain
performance. In comparison with 2009, the company has reduced its throughput time from four days to
just four hours, doubling capacity and at the same time increasing the service level from 40% to 97%.
Orders placed by 2pm are produced and shipped on the same day. The goal: provide service to
industrial customers for make-to-order parts comparable (or even superior) to what Amazon offers its
shoppers.
TRUMPF’s innovations are increasing transparency: the data matrix product code TRUMPF inscribed on
each part enables end-to-end traceability. And they are driving enhanced after-service performance as
well, by making it possible to monitor a tool’s usage remotely.
PwC
Digital Supply Chain Study 2020 April 2020
55PwC
AI in supply chain managementArtificial intelligence is accelerating supply chain improvements and will become the new norm
PwC
Digital Champions have already mastered Data Analytics and are using AI to supercharge supply chain capabilities
Digital Supply Chain Study 2020 April 2020
57PwC
Use an AI platform to supercharge supply chain
capabilities by developing and implementing AI use
cases that leverage various methodologies (e.g.
machine learning, deep learning, regression analysis)
Leverage all relevant data along the
entire supply chain – internal data across
the company, data from supply chain
partners and customers and publicly
available data
Establish a responsible and data driven
mindset by upskilling the supply chain workforce
towards citizen data scientists and democratise
access to data both internally across functions
and externally towards supply chain partners
PwC
Digital Champions use AI to turbo-charge key capabilities, fuelled by their ability to leverage external data
Digital Supply Chain Study 2020 April 2020
58PwC
70%of all companies use AI in at
least one area.
• AI is the key enabler of the supplychain ecosystems of
the future. 70% of all companies are using AI to support
their supply chain capabilities in at least in one area.
• While companies across all maturity stages are now
investing in AI, Digital Champions are far ahead – they
are 2-3x more likely to be harnessing AI in a capability
than Digital Novices.
How companies apply AI to boost their supply chain ecosystem capabilities
Digital Champions have clearly identified the areas where AI brings value.
Q9d. How would you characterise your advanced supply chain capabilities today? For which capabilities are you applying AI, machine learning or deep learning?
Base: 1,601 companies
24%
17%
End-to-end supply
chain planning
Supply chain
segmentation
Supply chain
transparency
33%
23%
Cost-to-serve
optimisation
Smart logistics
43%
13%
24%
41%
15%
41%
0%
27%
12%
3%
15%
All Companies Digital ChampionsDigital Novices
3-4 out of 10 Digital Champions are applying AI to generate transparency and make
better decisions.
PwC
Implementation of an AI and Advanced Analytics platform is the foundation for AI based supply chain capabilities
Digital Supply Chain Study 2020 April 2020
60PwC
Level of implementation of AI and advanced analytics platforms
Q13. How would you characterise the implementation of the following software-based supply chain technologies today? Base: 1,601
companies
40%
52%
Digital Innovators
Digital Followers
Digital Champions
48%
63%
57%
27%
13%
All Companies
32%
44%
24%
38%
11%
29%
22%
n Not implemented n Piloted n Implemented
• Overall only 22% of all companies surveyed have already implemented an AI and
advanced analytics platform. While 40% of all companies have nothing in place yet, already
>50% of those plan to implement within the next 5 years.
• Digital Champions clearly excel, with 63% already having an AI and advanced analytics
platform implemented and are currently scaling the technology across the company (89%
having AI and advanced analytics platform currently partially implemented).
• Digital Novices are still taking their decision (52% having nothing implemented
yet) and experimenting with the technology.
Digital Novices
Leveraging standard software for AI and advanced analytics platforms
86%
61%51%
• Across all companies the trend is to use standard software like Microsoft, AWS or Google
to build anAI and advanced analytics platform(61%).
• Digital Champions already have far more clarity compared to all other companies what
there path is.
Q13. How would you characterise the implementation of the following software-based supply chain technologies today? Base: 1,601
companies
All Companies Digital ChampionsDigital Novices
PwC
Digital Supply Chain Study 2020 April 2020
62PwC
Operating model developmentMastering tomorrow’s challenges throughnext level supply chain organisations and capabilities
PwC
Mastering tomorrow’s supply chain challenges through the next level supply chain organisation
Digital Supply Chain Study 2020 April 2020
64
Set-up cross-functional teams,
communities and supply chain
centers of excellence to drive advanced
capabilities by applying continuous
development and deployment approaches
Establish a self learning and
continuously improving organisation
through attracting digital talent and digital
upskilling of the supply chain workforce
Establish a state-of-the-art
technology backbone and embed
advanced analytics and IT into supply
chain to enable business-led transformations
by bringing business, processes, IT and
advanced analytics together
Establish new
collaboration models with
an extended partner
ecosystem to drive innovation
in the supply chain
Building blocks for the transformation towards a connected
and autonomous supply chain ecosystem
PwC
Innovating the supply chain through a continuous development and deployment approach
Digital Supply Chain Study 2020 April 2020
66PwC
Traditional approach Continuous innovation and deployment
Inn
ova
tio
n le
ve
l
Deployment across regions, divisions
Supply
chain vision
Training and roll-out
Wa
terf
all
de
ve
lopm
ent
Inn
ova
tio
n le
ve
l
Deployment across regions, divisions
Supply
chain vision
Ag
ile d
eve
lop
men
t w
ith
co
ntin
uo
us r
ele
ases Continuous deployment
PwC
Digital Supply Chain Study 2020 April 2020
67PwC
IKEA is connecting local and global supply chain experts from different functions to drive innovation and sustainability across the supply chain
Working in networks, where teams of experts collaborate across functional areas and geographies to
drive innovation
6 development networks (DNs) define innovation priorities
They cover the supply chain from production logistics and packaging to fulfillment of services
A combined Development Plan summarises the status quo and articulates a clear vision for the future
A comprehensive Roadmap detailing priority initiatives, avoiding repetition and leveraging synergies
across the development networks. Clear leadership, including two heads for each development network
and their executive-management sponsors
Robot picking of
heavy products
Biofuels on
container ships to
decarbonise
transportation
New capabilities and
business models for
a circular supply
chain
pwc.de
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© 2020 PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft.
All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, which is a member firm of
PricewaterhouseCoopers International Limited (PwCIL). Each member firm of PwCIL is a separate and independent legal entity.
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