Presentation on the Future of Supply Chain Technologies

PowerPoint Presentation

Supply Chain 2020October 2015

Supply Chain Insights LLC Copyright 2015, p. #

Disclaimer: I am a Skeptic


A Social Scientist


A Curmudgeon


A Fortune-teller of Sorts.


I Write for the Supply Chain Leader


Supply Chain 2020


The Supply Chain of the FutureWorld PopulationSource: The World at Six Billion United Nations, 2004; The World UN Population Assessment 2006; Unsustainable World, 04/15/08, BBCNorth America20072020339M342M

Europe20072020731M722M

Asia200720204.0B4.6B

L America 20072020572M660M

Africa20072020965M1.3B

Oceania2007202034M40M

MARCO TRENDS


8World population as of 12/31/2008 = 6.75 Billion (http://www.census.gov/main/www/popclock.html)World population as of mid-year 2015 = 7.27 Billion (8.35% increase vs. mid-year 2008)

Population in Less developed regions = 5.4 Billion in 2007, 7.9 Billion in 2050 (UN World Population Prospect, 2006 revision)

1950 U.S. = 5.96% of world population2050 U.S. = 4.60% of world population

Current State


Risk: Top Disruptions


Shifts in Ocean Cargo


Growing Demand Volatility


Why? The Long Tail of the Supply Chain: Growing Complexity


Evolution of Digital Processes


Confluence of Technologies


Current State


9 out of 10 Supply Chains are Stuck


Progress: All IndustriesIndustry Snapshots (2006-2013)IndustryYear over-Year Revenue GrowthOperating MarginInventory TurnsCash-to-Cash CycleRevenue per Employee (K$)SG&A Ratio Retail Apparel Industry 18%39%0.3927%0505%6826%32518%27%05%Apparel Manufacturing Industry 14%82%0.1232%0568%15008%400355%27%63%Mass Retail Industry 09%50%0.0620%0606%03148%35048%23%6%Beverage Industry 09%61%0.1916%0204%5346%512 NC24% 16%Pharmaceutical Industry 08%47%0.2329%0316%15547%57232%27%08%Chemical Industry 08%45%0.1010%0604%8723%55723%14%27%Medical Device Industry 06%38%0.1432%0213%20616%35112%34%04%Grocery Retail Industry 06%31%0.0337%1701%1050%40554%14%06%Consumer Packaged Goods 05%25%0.1473%08482%7217%33314%26% 09%Food Industry 05%55%0.1019%07 17%4004%53455%20% 18%

Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2013Industry Average comprised of public companies (combined food & beverage industry: NAICS 3112% where % is any number from 0-9, 311320, 311520, 311821, 311941 & 312111), (chemical: NAICS 325188 & 325998), (consumer packaged goods: NAICS 3256% where % is any number from 0-9), (medical device industry: NAICS 339112), (pharmaceutical industry: NAICS 325412) reporting in One Source with 20123annual sales greater than $1billionNC=no change


Descriptors Used by Leaders


Fallacy: Functional Excellence


Functional Organizational


Where are We on Supply Chain Excellence?


What We Expected


The Supply Chain Effective Frontier


Dow Chemical Company: Treading Water


Toyota and Honda


General Mills More ResilientSource: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 GIS0.17, 11.00Average (Operating Margin, Inventory Turns)

Inventory Turns Best Scenario


Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2014 Best ScenarioLLY0.24, 8.30Average (Operating Margin, Inventory Turns)

Inventory TurnsNovo Nordisk Making Progress


Continuity of leadershipSupply chain talent developmentFocus on a multi-year supply chain strategyClear governance to guide cross-functional decision-makingStrength in horizontal processesExcellence in supply chain planning, network design and inventory managementWhat Drives Top Performance?


Why TechnologyMatters


Best of Breed versus ERP Planning


Improvement in S&OP


S&OP: Technology Matters


Effective S&OP: Improved Alignment


Analytic Evolution


Data Types


Analytics Maturity


Current Focus


Opportunity at the Intersection of the Social and Interest Graph(s)


Simple Example of Test and Learn


http://www.levis.com

April 12, 2010

#fashion#advocate #intention#christine

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Current Focus


Newell RubbermaidListening: Newell Rubbermaid

#Future15SB @bwdumars


#Future15SB @bwdumars

Newell Rubbermaid


Listening: Lenovo


0000000CanadaCustomer A calls about a blue screen on a YogaCustomer B posts on Facebook about his X220s AC/DC adapter issuesLarge Enterprise Client experiences 5 keyboard malfunctions in their latest shipment. Complaints received through account executive[Critical Situation]BrazilCustomer F submits a service from on esupport.lenovo.com regarding their W530 hard driveMoroccoCustomers G & H comment on their X220s electrical issues on Twitter.comCustomer I called about Yoga screen issues AustraliaCustomer J write a review on NewEgg.com about AC/DC adapter issues on X220Customer K had an eChat with Lenovo about Yoga screen issuesChinaCustomer L wrote on Weibo about Yoga screen issuesCustomer M calls about a Tablet 8 battery issuesVoice of Customer Comes in Many Forms

USACustomers C & D write X220 product reviews on amazon.com and mention issues with AC/DC adaptersCustomer E posts on forums.lenovo.com that they are experiencing blue screens on their Yoga


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0000000Lenovo

6 recorded issues about X220s 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 batteryOne Voice A Single View of Perceptual Quality


Synchronize/organize all comments/complains into one voice46

Supply Chains Dont Play by the Rules47

But, what if they could?


Test and Learn Cross-Channel


Evolution of 3-D Printing of Human Organs


Ultimate Ear


Internet of Things


Big Hairy Audacious Goals

Business goals/ challenges:Scale the businessIncrease the number of machines in operation from 900 to 3,000 by 2016Expand internationally

Essentially we had to justify Whitbreads 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 wasteOur 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 partnerMove 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 DubaiLaunched new CEM-200 "intelligent" coffee station concession

Next steps (only if there is time)51

Automation of Replenishment


2:00am Emergency Drug Call


11:02


11:1811:22


11:1811:26


Opportunity

1/3 of shipped produce wasted: $34B in annual global waste from perishable foods

50% is due to temperature variations from the farm to retail shelf

Reducing temperature related shrink by half is approx. $9B opportunity.

Perishable Produce A Closer Look1% reduction in Shrink Increase in profit of $1,173,5556% reduction in Shrink Increase in profit of $7,378,830

One Commodity: Strawberries(based on data from pilot with retail grocer)

SHM PowerPoint Template Guidelines03.15.10Intelleflex Confidential


Building Export Pallets Group by First In or Shelf Life?Having different remaining shelf life mixed on pallets, causes problems later. Sending short shelf life berries on longer delivery cycles turns Good Berries into BAD Berries for the retailer and others. More yellow & red pallets in Philadelphia & Southern California ~ More shrink at the retailer ~ Lower customer satisfaction

15+14+13+11+15+15+15+10+

Presentation on the Future of Supply Chain Technologies

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