Digitization in supply chain management

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Digitization:WhatdoesitmeantoSupplyChainManagement?

Hae-GooSongPh.D.,VPofSupplyChainSolutionsato9Solutions

AddDigitalSpeedandIntelligencetoYourDecisionMakingProcesses

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dig·i·ti·za·tionnounCOMPUTING

“theprocessofconvertinginformationintoadigitalformat”

“therepresentationofanobject,image,sound,documentorsignal(usuallyananalogsignal)bygeneratingaseriesofnumbersthatdescribeadiscretesetofitspointsorsamples.”

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DriversforDigitizationWhataretheirpracticalimpacts?

Cloud

IoT

BigData

SocialMedia

Mobile

Drivers

DataSensing&Exchanging

DataSharing

DataProcessing&Analysis

DataConsumption

Impact

Variety,Volume,Velocity

Changes

Customer’sBehavior

BusinessModel

Process

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DigitizationinSCMSystemTheChanges

SCMProcess

ConsumerDataConsumptionData

Assumptions

Risks&OpportunitiesOperatingData

Initiatives(Marketing,etc)

MoreInput MoreAccurateOutput

PredictionPlanCorrelation

Decision……

Insight

Faster&BetterProcessing

Effectiveness,Efficiency,Speed

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DigitizationinSupplyChainInnovationCases

LogisticsPlanning

Design&ProductionSimulation

AssortmentPlan

ReplenishmentPlan

DemandSensing

ProductionAutomation

Real-TimeMonitoring

PredictiveMaintenance

Value-AddedServices

Sell/UseBuy/Make/Move

Planning

Execution

• SmartVendingMachine– CocaCola

• SmartShelves– Kraft,Kroger• TireNavigator– Bridgestone• SmartDiapers– Pixie,Kimberly-

Clark• InstantInk- HP

• SmartPort– HamburgPortAuthority

• ProductionLineSimulation- Maserati

• ConnectedToothbrush– P&G,Kolibree

• ConnectedCars(Maintenance,Accident,Concierge)

• SmartFarms– Caterpillar,JohnDeere

• AssemblyAutomation–MaseratiGhibli

• AutomatedAssembly• FleetTracking– UPS• LogisticsMonitoring–

Fedex (SenseAware)

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ValueAddedProductsSmartDiapers

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Connectivity:Real-TimeMonitoringSenseAware

• CurrentLocation• AccurateTemperature• LightExposure• RelativeHumidity• BarometricPressure• Shock• RouteAlert• LocationAlert

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FactoryAutomationSmartFactory- KL

http://www.smartfactory-kl.de/

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DemandSensingAssortmentplanningbasedonmarketintelligence

TargetCustomerSegments

(Personas)

AttributesAnalysisbyZip

Code

AttributesMappingfor

ProductCategory

TradeAreaClustering

Product A Product B Product C

Median Income Income Income

Median Age Age Age

Graduation Ratio Female Spending Graduation Ratio

Married Factor Gender Ratio No. of Females

Married with kids<6 Pollution Levels (A,B, C..)

Female Income

Married with kids >6 Allergy (37, 50, 80) Total Population

Total Population Couples Children <18

§ Medianincome,age§ Educationlevel§ Maritalstatus§ Familystructure(#ofpersons,kids,etc)§ Gender§ Owner/Renter§ Pollution,Allergy

StoreCoverage&PerformanceAnalysis

HighPotentialStores

§ Competitiveassortmentreview

§ Identifyuncoveredpotentialstores

§ Identifylowperformancehighpotentialstores

AssortmentPlanRecommendation

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WhataboutCorePlanningProcesses?Whatarepotentialopportunities?

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WhatwereChallenges?Lessonslearntfromthecustomers

FastDecisionMaking

(Planning)

BusinessInsight

ADayintheLifeofPlanner(DILOP)

BeyondNumbers

QualitativeIntelligence§ AssumptionsbehindtheNumbers§ Risks&Opportunities§ ReasonCode(Drivers)forGaps§ InitiativeManagement

FastResponse,Scenarios,&Collaboration§ FastPlanning§ ScenarioPlanning/What-ifSimulation§ IntelligencePropagation§ Real-timeCollaboration

ComprehensiveWorkflows§ DataManagement(Master,

Dynamic,BusinessRules)§ DataValidation§ PlanDashboard&Analysis§ InteractivePlanning§ GuidedProblemResolution§ ExceptionManagement

IntelligentAnalytics§ Root-causeAnalysis§ DemandShapingOpportunities§ CapacityRisks§ InventoryRisks§ NPI/EOLRisks

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Digitization:NewEnablersforSCMTransformationTechnologyroadblocksonSCMtransformationaregone

• LeverageMobile(InsightatyourFingertips)

• PromoteCollaboration(PeopletoPeople)

• Real-timeVisibility(AcrossRegions,Networks,Functions)

Connectivity• Consumption(Usage)Based

Replenishment• IntelligenceSensing&

Propagation(SmartAlerting&Sharing)

• Data&SystemdrivenS&OP(ReportsAutomation)

Automation• In-MemoryPlatform(Speed)• CloudComputing(Fast

Deployment&Adaptation)• OpenPlatformArchitecture

(Expandability&Flexibility)

Technologies

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AddInsightstoSCMDecisionMakingProcesses3W-InsightsFrameworkforSCMProcess

WhatHappenedandWhy?

3W-Insights

Whatshouldwedo?

Whatislikelytohappen?

Post-GameAnalysis• GapDrivers• ReasonCodes• GuidedAnalysis

Risks&Opportunities• Assumptions&Pulses• SmartAlerts• AnticipatedRisks&Opportunities

ProactiveCorrective-Actions• Counter-Measures• CollaborativeScenarioPlanning• RapidExceptionsManagement

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DigitalS&OPSystemdrivenandinsightrichmeeting

MarketInsightDrivenIntegratedBusinessPlanningProcess

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ImplementGlo·calizationAddregionalexcellencetoglobalgovernance

SA Europe APJ MiddleEast

DemandNetwork

NA

SupplyNetwork2SupplyNetwork1 SupplyNetwork3

GlobalFederationModel

ImplementGlobalDemand-SupplymatchbyProductline(BusinessUnit)02

ImplementRegionalIncrementalDemand-SupplyMatchacrossproductlines(businessunits)(SegmentPlanning)

03

BuildSolutionsonaSinglePlatform04

ImplementGlobalIntegratedDemandPlanningProcessandSystem

01

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AdoptAll-In-OnePlanningSolutionsReal-Timeplanvisibilityacrosstheboard:singleview

OneView,RealTime,Connected SystemwithDataIntegrity

CEO

Executives

Managers

Planners

CEO

Executives

Managers

Planners

Report v1.0

Report v3.0

Report v10.0Weeks~Months

Filtering

Tweaking

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UnconstrainedForecastDriven ConstrainedS&OPPlanDriven

$↔VolumeDisconnect $↔VolumeSynchronization

NoEarlyWarningMechanism SmartAlert,Risks&OpportunitiesVisibility

FingerPointing&BlameGame SharingtheFactsandSolvingtheIssuesTogether

SlowandInfrequent(Quarterly,Monthly) FastandFrequent(Monthly,Weekly)

“Afterthefact”basedCorrectiveAction “Preventive”CorrectiveAction

TraditionalS&OP NewGenerationS&OP

UnidirectionalReportingWorkflows Multi-directional,Real-time,CollaborativeDecisionWorkflows

ChallengeonDataIntegrity FocusonDataInsight

AggregatedSnapshotInformation LiveInformationwithAggregationandDrill-DownCapability

UpgradeYourS&OPProcess

LeapfrogyourS&OPcapability

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ReduceDecisionMakingLeadTime

Achievingthenear-zerolatencyinyourdecisionmakingprocess

ValueLost

ActionTime

Value

Time

PropagationLatency

DataTransferLatency

DecisionLatency

Risk&OpportunityEvent

SharedVisibility

ScenariosEvaluatedDecisionTaken

DataReadyforPlanning

Source:Dr.RichardHackathorn,BolderTechnologiesInc.

PlanningLatency

Real-TimePropagation&Collaboration

IntegratedEmail

SmartAlert

SmartCollaboration

IntegratedTaskManagement

AllPlanningProcessesonsinglePlatformBusinessGraph

HighPerformance,Analytics&PlanningEngine

DecisionSupportwithScenarioPlanning&InsightScenarioPlanning

VisualManagementDigest

Approvals

ForecastAssumptions

IdeastoInitiatives

LinkedPlanUpdates

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DigitalDecisionManagementPlatformsVisibility� Analytics� Planning� Collaboration� Learning

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