Iiswbm seminar final

P.P.Sengupta

Supply Chain Management in 2030: Shape of things to come

Topics

Supply Chain in the VUCA world Today’s leading supply chains Economic megatrends Business mega trends Technology megatrends Supply chain game changers How supply chain of 2030 will look “Black swans” in supply chain

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Features of today’s best supply chains

Agile Visible Collaborative Flexible Tightly co-ordinated Lean, Just in time

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Supply Chain in the VUCA world

VUCA “New Normal”

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Best supply chains in the world, 2013 , Gartner Group

1 Apple 2 McDonald's 3

Amazon.com 4 Unilever 5 Intel 6 P&G 8 Samsung

9 Coca Cola 10 Colgate 11 Dell 12 Inditex 13 Wal-Mart 14 Nike

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A few Supply chain leaders and their distinguishing marks

HUL McDonald GM Amul Al Quaeda

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A modern Supply chain is like a symphony

An orchestra , where dozens of string, brass, woodwind, and percussion instruments play their own tunes to create a perfect piece of music.

Similarly , in a well-coordianted supply chain ,the trading partners collaborate to create a perfect harmony bringing superior value to their customer.

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The bloodline of a supply chain

“The bloodline of today’s supply chain is IT . Without it , it drops dead“

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Making prediction is risky

Let’s rather look at the Megatrends

Famous short sighted predictions

“I think there is a world market for five computers” – Thomas Watson, CEO, IBM 1943

"We don't like their sound, and guitar music is on the way out." -- Decca Recording Co. rejecting the Beatles, 1962.

"640K ought to be enough for anybody.“ - Bill Gates, CEO, Microsoft, about computer hard disc size , 1981

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The most embarrassing one

"The concept is interesting and well-formed, but in order to earn better than a 'C', the idea must be feasible." -- A Yale University management professor in response to Fred Smith's paper proposing reliable overnight delivery service. (Smith went on to found Federal Express Corp.)

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Pace of Change

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Pace of Change

Human race’s 650 0f 800 lifetimes spent in caves

All major technological changes taken place in our present lifetime

Only in last 70 lifetimes , communication from one to next possible

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Pace of Change

Year Fastest transportation

Speed

6000 BC Camel Caravan 8mph

1700 AD Mail Coach 10 mph

1825 AD Steam engine 13 mph

1880 AD Steam Locomotive

50 mph

1980 Space craft 18,000 mph

2010 Space craft 36,000 mph

Economic mega trends 2030

Economic mega trends 2030

Intensifying competition for finite resources . "Asia,“ will surpass the combined economic and

military might of the Europe and the United States

G7 will be replaced by E7 India will become the youngest nation in the

world 2 billion jobs will disappear by 2030 Consumers will learn to live with no waste Wages in Asia will rise to European level on PPP

basis

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Business mega trends 2030

Business Mega trends 2030

Economy will be Spawning New, Fast-Growing Entrepreneurial Companies.

Collaboration will be common , even among Competitors

Consumer choices will explode. The next billion of consumers will not be “another billion”

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“War for Talent” will intensify Consumers will be increasingly

concerned about a brand or product’s so-called SECH rating

Crowdsourcing will become increasingly popular

Social Media will integrate with Business

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Reducing carbon foot print will be a business compulsion

Terrorism will increasingly bother business

Speed would become the new normal

Transaction costs will fall dramatically

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Regulatory pressures will rise Mass customization will be the order

of the day The cost of making things will get

lower and lower. The cost of moving things will get

higher and higher .

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Technology Mega trends 2030

Technology megatrends 2030

“ Big Data” will be the key to innovation

Industry 4.0 (M2M) will be a reality. Cognitive Computing will commence

commercial application. SMAC will rule All devices will converge . BYOD a

new normal

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Additive manufacturing (AM) will be firmly in place

Five potential platform technologies—nanotechnology, genomics, artificial intelligence, robotics and ubiquitous connectivity will thrive

Pervasive Networking will dominate

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Web 2.0 will mature to Web 3.0 as Internet of things

Semantic web will thrive Collaborative IT infrastructure will be

popular Virtualization will be complete Real time data mining will become a

possibility with everything on the cloud.

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Game-changing shifts : Supply Chain Management 2030

Seven Game changing shifts in SCM

Absolute value for the firm to relative value for customers

Forecasting to endcasting (demand management)

Push to On-demand service Vertical integration to virtual

integration

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Seven game changing shift

Adversarial relationships to collaborative relationships

Incremental change to a transformational agile strategy

Information hoarding to information sharing and visibility

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How supply chains of 2030 will look like ?

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What will be the new signatures of SCM?

Risk Intelligent Personalized omni-channels Slowgistics Services of Supply Chain

orchestrators Real time SaaS model Green and Sustainable

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“Black Swans” in Supply Chain

The Unknown Unknowns : Low probability events with high impact

“Black Swan” events impacting SCM A severe pandemic Faster-than-forecast climate change Collapse of the European Union Russia joins NATO Collapse of China (or its embracing of

democracy) World war or Massive Cyber attack A sudden retreat of the U.S. from global

affairs A solar geo-magnetic storm

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Black Swan events in Supply Chain

Supply Chains of 2050 will be completely “self healing” and able to predict “ Black Swans “ by creating “process playbooks”.

Process playbook is systematized set of actions to take when supply chains face disruptions . It learns key insights and build muscle memory to deal with such future events.

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What a SCManager Will Do in 2030

Strategic, integrated customer value management,

”Virtual plant" management Continuous product and process

improvement Continuously innovate Cost and profitability targeting, New product and supplier

development

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What He Will Not Do in 2030

Routine purchases or sourcing or re-buys

Signing contracts , purchase orders or SLA s.

”Fire fighting” Inputting information Inspection

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Two Things That are Sure to Happen

Supply chain management will be a mission critical, “top of the list” activity in your organisation

Technology that will be used in SCM will make today's supply chain Management systems look like stone-age.

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Three new paradigms

Artificial intelligence will play a central role in all supply chain activities.

Supply chains will be branded and marketed.

Logistics operations will be paperless and "near laborless."

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Five Key Trends for Future

1) Supply chains will not only connect with other supply chains, but also with transportation systems, financial markets, electric power grids and even natural systems like rivers and weather patterns.

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2)With so much embedded intelligence, SCM can progress from decision support to predictive capability.Dashboards on devices, perhaps not yet invented, will display the real-time status of procurement orders, fulfilment status, sources of supply, pipeline inventories and customer orders .

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3) Smarter supply chains will take advantage of unprecedented levels of interaction – not only with customers, suppliers and IT systems in general, but also among smart objects that are warehoused or even flowing through the supply chain.

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4) This extensive interconnectivity will facilitate collaboration on a massive scale, hitherto unknown .Worldwide networks of supply chains will be able to plan and make decisions collectively.

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Five Trends for Future

5) Intelligent supply chains will assess hundreds of constraints and alternatives, allowing decision makers to simulate various courses of action.It would instantly reconfigure supply chain networks when disruptions occur.

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It could acquire rights to use physical assets like production capacity, distribution facilities and transportation fleets on demand through virtual exchanges.Equipped with sophisticated modelling and simulation capabilities, the smarter supply chain will move past sense-and-respond to predict-and-act.

Thank You