20130917 the future of supply chain management - a strategic viewpoint - sanitized

IBM Confidential and Proprietary – Thorsten Schroeer for the Electronics Centre of Competence© Copyright IBM Corporation 2013 • All rights reserved

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September 2013

The Status Quo & Future of Supply Chain Management

A strategic “Point of View”


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What is the carbon footprint of an iPhone?

iPhone 4: 53kg CO2

iPhone 5: 75kg CO2http://www.carbonfootprint.com/energyconsumption.html


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Thank You For The Invitation• Thorsten Schroeer

• Member of IBM Global Electronics Industry Center of Competency

• IBM consulting practice „Global Business Service“

• Work Experience• 8 years IBM’s Electronics Industry

• 5 years IBM Supply Chain Consulting Practice • 5 years Ryder Supply Chain Solutions• 1 year Fraunhofer Institute Material Flow & Logistics• 15 years member www.CSCMP.org

• Education:• Masters Mechanical Engineering, Dortmund• Masters Industrial Engineering, Atanta


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This presentation will cover four key areas

2What SCM Leaders

do?

3What is the software

defined Supply Chain?

4How to get to the

next level?

1What is the starting

point?


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Our modern notion of the supply chain began with Henry Ford.


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Complex supply chains evolved with multi-tier supplier networks with

largest carbon footprint ever.


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It’s been a function of our global supply chain that we leverage these three rules of product design

Parts

Assembly

Controls

Custom

Components

Mechanical

Standard

Modules

Digital


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And this approach led us to three characteristics of industry structure and trade that go well beyond electronics

Economies of Scale

Multi-tiered Supply Chains

Low cost suppliers

BIG

COMPLEX

GLOBAL


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point?

2What SCM Leaders

do?



4How to get to the

next level?


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Globally recognized Leaders in Industrial Supply Chain Management *

* Source: Gartner 2013 Supply Chain Top 25,, IBM Point of view


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SIMPLIFICATION: Apple has implemented one of the most rigorous and

disciplined simplification models worldwide.

The Apple way - Almost no promotions, No B2B products, B2B channels, simplified

order handling rules, one single, integrated back end, no real “configuration”.

Under Tim Cook we have seen most successful SCM

war won ever on complexity and order management

via simplification.


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Standardization – Electronics company developed a cross business unit aligned process framework to support standardization and measurable business outcome via APQC reference process framework.

APQC Industry Process Framework

– Open Standard, Industry Specific

– 20 years of Industry Peer review,

widely adopted in the industry

– Strong references towards SCM

– Key focus on benchmarking


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Visibility: Electronics company deployed control tower concept to monitors KPIs and production status with global alerts, timely problem identification and decision resolution.

VP Manufacturing View

Management COO View

CSCO View

Profit Navigation Manufacturing Cockpit Supply Chain Network


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3rd party Transformation: IBM‘s Supply Chain Logistics Transformation journey serves as role model for 4PL logistics partnerships.

IBM and 3PL sign a five-year contract for the distribution of all

finished goods, customs formalities and reverse logistics, throughout Europe, Middle East

and Africa

IBM extends the agreement to include Spain and Portugal

1999

2002IBM and 3PL sign a five-year contract for the pre

and post production logistics of IBM eServers

made in Dublin

2008

2004

3PL signs a contract with IBM covering all end of

lease returns from clients across Europe

3PL signs multi year outsourcing contract with

IBM and acquires its global logistics

operations

1998

IBM outsources logistics to 3PL in a five-year contract for France, Germany and Italy. 3PL acquires IBM assets, including warehouses across Europe – 750 IBM employees join 3PL

2009

2012

Project moves resources with IBM expertise to 3PL for the

beginning of a long-term logistics partnership

Logistics steady state attained with ongoing

global standardization and

enhancements


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Collaboration - A typical collaboration platform for the supply collaboration and replenishment process, example packages are E2Open or Sterling.


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Self Service – Electronics company developed Online Order Process to manage lead times in a pure build to order process.

Production


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Big Data & Analytics: IBM’s supply chain drives towards smarter supply chain analytics. IBM employs analytics on an evolving platform of Big Data and multi-enterprise supply chain visibility.

� Volume

� Velocity

� Variety

� Descriptive

� Predictive

� Prescriptive

Business Analytics

Big Data Platform

IBM Buy Analysis Tool

Critical Parts Management Tool

Quality Early Warning System

IBM Supply Chain Examples

Supplier Risk Management

Other…

IBM recognized as a leading innovator for 2012 in the Electronics Industry on the basis of the QEWS solution

September 17, 2012 Issue


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At XX, the biggest part of our

company is our installed base – the

machines. Embedding them with

more sensors and having the ability to do analytics allows us to get more

out of the products. We can offer --

as a service -- not just real time data but real time knowledge. We can

drive efficiency.

For a long time our service approach was

“break-fix.” It was successful model, but

not sustainable. Today customers don’t

want their products to break; they can’t wait for the fix, nor can they afford to. They

don’t want any unplanned downtime or

outages.

They want guaranteed outcomes.

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Analytics in Service Supply Chain: Electronics company takes holistic view towards its install base and the role of predictive analytics towards buttom line.

CEO Compnay, June 19, 2013


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point?

2What SCM Leaders

do?



4How to get to the

next level?

The Software DefinedSupply Chain?

A Study Overview

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3 key software enabled trends will drive towards a software defined supply chain in the future.


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Our old hardware constrained universe is now a choice, not a requirement. We can not simply share apps, we can share things in a digital space – and be rewarded for it


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3D Printing in Industrial Context – Case Studies Siemens AG

http://www.youtube.com/watch?v=VyEgbyNg0Q8


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3D Manufacture

Standardization


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Robotics

Modularization


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Intelligence

Digitization

Moore’s Law

Open Source


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Using one example from our study –we find dramatic changes in a supply chain that is small, simple and local

Cost

Carbon Footprint


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How 3D printing could revolutionize

your industry?


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The market is already expressing itself, albeit with a “toes in the water” approach –which we think is smart.

In May 2013, Staples started carrying 3D printers

http://www.gizmag.com/staples-selling-3d-printers/27399/ http://www.technology-digital.com/web20/ups-to-offer-3d-printing-service-in-retail-stores

In August 2013, UPS announced in-store 3D print services

3D printed Solar Cell

MIT's Department of Materials Science and Engineering


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Centralized Manufacturing

In summary the software defined supply chain will radically change the way we will design supply chains.

Complex Inbound Logistics

Complex Outbound Logistics

Significant Logistical Lead Times

Significant Transportation Costs

Complex Tax & Transfer Pricing

Local/Distributed Manufacturing

“Last Mile” Inbound Logistics

“Last Mile” Outbound Logistics

Near Zero Logistical Lead Times

Minimal Transportation Costs

Local Tax & No Transfer Pricing

Traditional Manufacturing 3D Manufacturing


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70% of Supply Chain Executives are unpreparred for this transformation*.


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Implications and Recommendation are BOLD.


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Five questions you might want to ask yourself, as you journey into these waters


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point?

2What SCM Leaders

do?



4How to get to the

next level?


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3

6

Synchronize supply & manage demand(S&OP, IBP, CPFR, Demand Sensing, Collaboration, Social Supply Chain)

Apply customer & supply chain segmentation. Operate demand driven push-pull supply chain.

Enable postponement/late customization. Integrate manufacturing execution and planning elements

Plan for the manufacturing revolution„The Software Defined Supply Chain“

Apply Smarter Supply Chain Analytics & Big Data, Enable fact-based decision-making -> Advanced Risk Management Analytics

Provide superior customer fulfillment through logistics excellence

6 Key Supply Chain Design Guidelines

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InnovationInnovation

GlocalGlocal

VisibilityVisibility

Self-HealingSelf-Healing

Plug & PlayPlug & PlaySustainabilitySustainability

Big DataBig Data

Gen NowGen Now

Hyper connectedHyper connected

Social BusinessSocial Business

Client-centricClient-centric

Digital/Social ageDigital/Social age

Analytics & Automation Analytics & Automation

FlexibilityFlexibility

Control Tower

Control TowerCash

conversionCash conversion

“On Demand” has become “Before I even ask”

“On Demand” has become “Before I even ask”

WatsonWatson

The IBM ISC has become a collaborative, end to end, intelligent network focused on client value and cash conversion

Build your Vision of the Future Supply Chain…

What is the carbon footprint of an iPhone?

iPhone 4: 53kg CO2

iPhone 5: 75kg CO2

http://www.carbonfootprint.com/energyconsumption.html

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iPhone 8: ?? CO2


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This presentation covered four key areas


point?

2What SCM Leaders

do?



4How to get to the

next level?


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Let’s Stay In Touch

[email protected]

www.linkedin.com/pub/thorsten-schroeer/2/b40/a77

www.xing.com/profile/Thorsten_Schroeer

IBM Electronics www-935.ibm.com/services/us/gbs/industries/electronics/