A.T. Kearney 82/7478 1

Supply Chain Technologies

Dr. Dale S. RogersNevada Logistics Institute

Supply Chain Technologies19 August 2011

2

Flow Management

PhysicalFlows

FinancialFlows

InformationFlows

3

Analytics

Analytics

BusinessIntelligenceCompetency

Center

DecisionSupportSystems

PredictiveModeling

StatisticalAnalysis

DataMining

4

Consolidation and Complexity

WMS

TMS

OrderManagement

SCV

DataSynchronization

&Warehousing

NetworkLocationSupply

ChainPlanning

SoftwareCompany

SoftwareCompany

SoftwareCompany

SoftwareCompany

SoftwareCompany

SoftwareCompany

SoftwareCompany

Analytics

5Source: Erik Brynjolfsson, MIT E-Commerce Center

6

“Rules of Thumb”

Total company IT costs should equal approximately 1% of total revenue

Supply chain IT costs should consist of 15-20% of total IT budget

7

2010 AMR Supply Chain Top 251. Apple2. Procter & Gamble3. Cisco Systems4. Wal-Mart Stores5. Dell6. PepsiCo7. Samsung Electronics8. IBM9. Research In Motion10.Amazon.com11.McDonald’s12.Microsoft13.The Coca-Cola

Company

14.Johnson & Johnson15.Hewlett-Packard16.Nike17.Colgate-Palmolive18.Intel19.Nokia20.Tesco21.Unilever22.Lockheed Martin23.Inditex24.Best Buy25.Schlumberger

8

“The Network is the Computer”

9

“The Network is the Computer”

Movement away from traditional software

Transparent ASPs

Focus on Middleware

The Network is the Computer

10

Always On, Always Connected

Converting information into insights

Managing time and staying focused on high priority tasks

Staying on the same page as colleagues

Managing the balance between work and family lifeSource: Digital Workstyle: The New World of Work. (2005) A Microsoft White Paper

11

Knowledge

Data Information Insight

Simplification and Insight

12

Business Rules

Restrictions

Triggers

TimingInference

Computations

Heuristics

13

Bucket Brigade

Information can move quickly inside the walls. Data flow to “information machine” a bucket brigade. Web allows move to shared data pipeline. Linkages are the key

1858 Rumsey fire wagon. Supplied with water by bucket brigade.

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Types of SCM Planning

StrategicNetwork Planning

Demand Planning

DemandFulfillment

&APS

Master Planning

Production Planning

&Scheduling

Purchasing&

MaterialsRequirements

Planning

Transport Planning

&Distribution

Planning

15

19th Century Electricity Generator

16

Computing as a Utility

17

Amazon Web Services

18

Amazon Web Services

Computing power for $.10 an hour

Storage $.15 per gigabyte per month

Revenues of $100 million for Amazon

19

Cisco Supply Chain

20

Cloud Computing

Reduced need to own software

Have computing and data in the “cloud”

3,000 firms per day moving to Google Apps

21

Software as a service (Saas)

Traditional Software On-Demand Utility

Build Your Own Plug In, Subscribe

Pay-per-Use

22

Cost Avoidance

23

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Cloud Adoption The long-term shift toward Web-based software is apparently taking a bit longer

than expected. According to a new survey from research outfit NPD, 73% of PC users have never tried a Web-based office productivity suite. And of those who have, only a paltry 0.5% have been impressed enough to abandon their desktop office applications.

”It would seem, then, that while 90% of computing will someday reside in “the cloud,” as Google CEO Eric Schmidt recently claimed, it isn’t going to reside there for quite a while.

“Maybe in the next 30, but not in the next five,” says Burton Group analyst Guy Creese, who suggests consumer adoption of SAAS will follow a path similar to that of consumer adoption of electricity in the late 1800s. “If you look at the electricity-adoption curve, it mimics what is happening now,” Creese explains. “People made their own electricity for the first 30 years. It was only in 1910, when Samuel Insull began creating electricity holding companies, that businesses and people decided it was easier and cheaper for someone to take over the task. If you figure usable PCs were invented in 1975, we’re about 30 years into a 50- to 60-year adoption cycle. People move a lot slower than technologists want them to; that’s why I think Microsoft’s ’software and services’ viewpoint is the less exciting but more sensible one.”

25

2/10 Rule

2 years of excited “buzz”

10 years before technology “blossoms”

2 Years

10 Years