digital supply chain · 2018-08-16 · headline verdana bold digital supply chain sandeep...
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Headline Verdana Bold
Digital Supply ChainSandeep Chatterjee 1st August, 2018
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 2
The views expressed are personal
and not necessarily that of Deloitte
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 3
Contents
▪ Introduction
▪ Supply Chain Redefined
▪ Disruption and Digitization
▪ IoT/Mobility
▪ Real Life
Make in India: Reinventing India’s Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP
Introduction
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 5
• Sellers Market
• Predictable Sales
• Stable Demand
• Limited Competition
• Limited Product Range
• Simple Products
• Long Product Life Cycles
• Long Lead TimesSmooth
Sailing
The Business World in 1980
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 6
• Volatile
• Uncertain
• Complex
• Ambiguous
• Fast Paced Buyers Market
• Tough Competition
• Extensive Product Range
• Shorter Product Life CyclesNavigation of
Turbulent Rapids
It is a VUCA World in 2017
Make in India: Reinventing India’s Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP
Supply Chain Redefined
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 8
Products move downstream
Information moves upstream
Supplier Producer Distributor Customer
Traditional View of a Supply Chain
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 9
Source: Unilever Website
The Real World is far more Complex
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 10
Complex and Volatile is the “New Normal”
Digital Supply Chain© 2016 Deloitte Touche Tohmatsu India LLP 11
Source: Aberdeen Group Supply Chain Visibility 2013
The Demand Network is enabled by Information Technology
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Disruption and Digitization
How will Digital Supply Networks support clients’ business strategy in a digital world?
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The rise of exponential technologies has created a burning platform: disrupt or be disrupted
Exponential Technology Change……Disrupting Supply Chains
Across All Industries
1992
$1,245 per Gbps
<$10
Bandwidth
$222 per million transistors
<$0.06
Computing
<$0.01
$569 per GB
Storage
Co
st
of
Perfo
rm
an
ce
Today
Source: Deloitte University Press
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Disruption within the supply chain is driving better integration across platforms, transforming industries and changing consumer expectations
A consumer products
company is able to
reroute distribution
vehicles in real-time
based on unforeseen
events (e.g., stock-
outs, increased
demand, product
recalls)
Dynamic /Predictive Routing
Workforce Enablement
A large global retailer
analyzes social media
chatter to optimize
local inventory
assortment and
enhance inventory
planning (e.g., a spike
in social media activity
about an upcoming
phone launch helps
buyers improve their
purchasing decisions)
Social Media Analytics
A beer brewing
company leveraged
advanced
optimization and
scenario analysis to
better understand
the cost impacts on
supplies (e.g.,
glass), enabling
more informed
sourcing decisions
Strategic Sourcing
A leading pharma
company introduced a
global Real World
Evidence (RWE) platform
to collect clinical and
patient data from
hospitals and third
parties. This enabled the
company’s R&D and sales
functions to better
understand the patient
outcome sales dynamics
Real World Evidence
DeliverMakeSourcePlanDevelop Support
Life sciences
companies are using
AR software to give
lab technicians visual
instructions to
perform
maintenance tasks,
improving machine
uptime and reducing
emergency service
calls
AugmentedReality
A high-tech
semiconductor
manufacturing
company uses Smart
Glasses to remotely
support off-shore
manufacturing and
assembly through
on-demand
knowledge sharing
Digital Supply Networks Thinking
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A new phase of Digital Supply Networks management has arrived: Machines are augmenting human performance
Power Generation
Industrialization
Electric Automation
Late 18th century
Start of the 20th century
1970s to 2000s
Steam engines and hydraulic power drive improved
productivity and enabled industrialization
Advances in computing and the internet allow for
information to be captured and transferred more quickly than
ever before
Electricity and assembly lines paved the way for mass
manufacturing, improved infrastructure, and advances
in financing and credit markets
Execution of connected products, customers, and
supply chain and operations -driven by a vast network of cyber-
physical systems
Optimize Traditional Objectives…
Cost Innovation Service
Quality Safety Flexibility
4th Industrial Revolution
Digital Supply Networks
…By Better Managing
Visibility Variability
Volume Velocity
…and New Objectives…
Revenue
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Companies must choose priority initiatives to configure their supply chains to meet competitive objectives
Sensor/Data-driven Design Enhancements
Data as a Product or Service
Analytics-driven Demand Sensing
Proactive Quality Sensing
Analytics-driven Sourcing
Augmented Reality-enhanced
Operations
AugmentedReality-enhanced
Logistics
Inventory-driven Dynamic Pricing
Augmented Reality-enabled
Customer Support
Open Innovation / Crowdsourcing
Make-to-Use with 3D Printing
DynamicInventory Fulfillment
Track-and-TraceSolutions
Asset Sharing Automated Production
Automated Logistics
Sensor-driven Replenishment
Pushes
End-to-end Transparency to
Customers
Rapid Prototyping
Ultra-delayedDifferentiation
POS-driven Auto-replenishment
Proactive Risk Sensing
Blockchain-enabled
Transparency
Predictive Maintenance
Direct to User Delivery
TargetedMarketing
Make-to-Use with 3D printing
Virtual Design Simulation
Real-timeInventory
Optimization
Cloud/Control Tower
Optimization
Sensor-enabled Labor Monitoring
Driverless Trucks Predictive Aftermarket Maintenance
Sensor-driven Forecasting
Supplier Ecosystem
Dynamic / Predictive Routing
Aftermarket
Sales &
Services
Sales
Optimization
Logistics
Optimization
Operations
Efficiency
Supplier
Collaboration
Risk
Prevention &
Mitigation
Planning &
Inventory
Efficiency
Product
Optimization
Design
Process
Optimization
Sample Tactics
Supply Chain
Transformations
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The flows of information and movement between the digital and physical worlds are made possible by employing several integrated DSN technologies or capabilities
Additive
Mfg &
Advanced
Materials
Robotics &
Autonomous
Vehicles
Augmented
/ Virtual
Reality
Intelligent
Workflow
Automation
Digital
Scanning
Cyber
Tracking
and Profiling
Cellular,
Satellite &
Wi-Fi
Comms
Signal
Ingestion
and Cloud
Edge
Computing
OT Security IT Security
Machine
Controls
Visualization
, UX and
Mobile
Sensors
and
Wearable
Technology
Data Science &
Algorithms
Machine Learning
Deep Learning &
AI
Natural Language
Processing
Video & Spatial
Analytics
Physical Digital
Signal
Transformation
(Processing)
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IoT/Mobility for Supply Chain Visibility
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PEOPLE ANALYTICS
Physical devices and objects intelligently connected
Delivery of the right information to the right place at the right time
Connection of people in more relevant and valuable ways
Internet of Things
The Internet of Everything combines things, processes andpeople with relevant
data
THINGS
PROCESS
Individual data streams are processed and analyzed with algorithms
Internet of Things (IoT) refers to a world of connected objects generating data and providing insights for use in new services
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The Internet of Things offers a potential economic impact of $4 trillion to $11 trillion a year in 2025
Business imperative
Source: McKinsey Global Institute analysis
Factories—e.g., operations management, predictive maintenance
Cities—e.g., public safety and health, traffic control, resource management
Human—e.g., monitoring and managing illness, improving wellness
Retail—e.g., self-checkout, layout optimization, smart customer-relationship management
Outside—e.g., logistics routing, autonomous (self-driving) vehicles, navigation
Work sites—e.g., operations management, equipment maintenance, health and safety
Vehicles—e.g., condition-based maintenance, reduced insurance
Homes—e.g., energy management, safety and security, chore automation
Offices—e.g., organizational redesign and worker monitoring, augmented reality for training
Nine settings where value may accrue Size in 2025, $ trillion
1.2-3.7
0.9-1.7
0.2-1.6
0.4-1.2
0.6-0.9
0.2-0.9
0.2-0.7
0.2-0.3
0.1-0.2
Deloitte Digital Copyright © 2016 Deloitte Digital LLP. All rights reserved.
HOW EXACTLY DOES IOT WORK?The Internet of Things (IoT) is a world of intelligent, connected devices that generate data companies can use to transform business. Sensor networks feed data models which can then be analyzed to reveal hidden insights that inform decisions and actions.
S E N S O R S D E V I C E S N E T W O R K S P L A T F O R M D A T A A P P L I C A T I O N S & A N A L Y T I C S
B U S I N E S S P R O C E S S & B U S I N E S S M O D E L I N N O V A T I O N
End to End IoT Solutions
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The cold chain is a concept that necessitates maintaining strict control over the temperature and tolerances of pharmaceutical product through out a supply chain including logistics, distribution, manufacture, storage and transportation prior to final use by the patient without deterioration.
Regulations
Health
Canada
Internation
al Safe
Transit
Association
FDA – CFR
205, CFR
211
EMA
Parenteral
Drug
Association
– Technical
Report No39
Cold chain logistics costs are growing by 5% YoY20 of the 50 Top Selling Drugs need 2-8°C cooling1
1 Source: Cold Chain BioPharma Logistics Sourcebook 2013; Monitor Deloitte Expert Interviews; lifeconex-
lcx.com
2 Note: Synthetic drug
2 5,002
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Global Sales 2012 (mn)
Series1
Pharmaceutical Cold Chain
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Note: This visual applies to the common value chain, the clinical trial value chain adds even more complexity as more information needs to be captured and regulations are
even stricter
Lack of connectivity limits ability to effectively monitor environmental parameters
The Cold chain – Process Overview
Raw material suppliers/ sourcing
Refrigerated transport
Manufacturing and packaging
Cold storage warehouse
Refrigerated transport
Refrigerated transport
Cold storage warehouse
Healthcare facilities
Investigations & root cause analysis cost companies billions
Cost of each root cause
investigation$6K
Excursion
Excursion
Excursion
Temperature monitors couriered back for reading data. Material released after data is
read
Refrigerated transport
Time to investigate excursion 4-6 weeksManual temperature
recording
Manual temperature
recording
Manual temperature
recording
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Opportunities for service providers
Temperature monitoring as a service
Real time notificationsThe system can send real time notifications to the transport company if a temperature excursion is detected. This will provide the transport provider to take immediate corrective actions where possible
RCA Analysis Regulatory queries on temperature monitoring can be supported through the highly available data The data can also support RCA and investigation after the fact processes if any excursions are experienced. Temperature sensors can be augmented with light, motion and location sensors to further enhance the RCA process and enable continuous improvement.
Data TransparencyThe solution enables adding temperature monitor at a pallet level and is tied back to the delivery. If an excursion is experienced at any point in the shipping process appropriate notifications can be triggered to the QA personnel.
Receiveorders
AddTemperaturesensor
Pickpack
OutboundLogistics as a service
Shipping as a service
Monitoring and data
integration as a
service
Notify QA
QuarantineMaterial
Engage customerservice
Investigateclaim
Processrefund
Sensors as a service
End Client Service Provider
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“Certificate of compliance to be provided to customer with environmental parameters
History maintained for the delivered material, batch and the pallet”
Quality certificate compliance
Quality certificate
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Shipment Carrier Registration
Number/Storage Area for
malfunction
Specifications infringed for
notification creation
Shipment number for the
delivery carrier having
malfunction
Parameter/Sensor having
the malfunction
− Notifications and alerts triggered based on out of specification (OOS) recordings for environmental parameters
− Customizable behavior of OOS alert and notification parameters
◦ Alerts – for every OOS create an alert
◦ Notification – for three OOS create a notification with action items
Real time notifications and alerts
Alerts notifications
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Equipment maintaining parameters (Refrigerators, humidity controllers) can be tracked and maintained—
− Preventive and predictive maintenance
− Notifications and alerts converted to Breakdown Maintenance Orders
− Equipment history and health monitoring
Tracking equipment health
Predictive maintenance
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Detailed storage bin level material health—In warehouse
Smart business Fiori apps
− Overall summary in warehouse with material health as per environmental parameters (temp, humidity, light)
− Drill down to storage bin level tracking
− Relevant action items as per the out of specification (OOS) observations
0
5
10
15
20
25
30
Initiate Quality
____________
Initiate Maintenance
Cancel Pickup
____________
Initiate Quality Check
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• Criteria to classify a delivery as failed or successful is configurable
.
Failed delivery analysis by third party logistics partners
Analytical reports
− Executive Dashboard for Failure on Delivery by Third Party Logistic partners
− Identification of vendors with highest failure rates
− Failed deliveries due to non compliance of environmental parameters during storage or transportation
− Relevant action Items as per the out of specification (OOS) observations
− Further analysis: Drill down to individual deliveries, routes and notifications/orders created for resolution
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Customer
Material
Period
Third Party Logistic Vendor
Warehouse ID
Selection Criteria
− Executive Heat Map—Real time and post analysis for tracking region wise failed deliveries
− Relevant action Items
− Further Analysis: Drill down to customer, individual deliveries, materials and notifications/orders created
Region wise delivery failure heat map
Analytical Reports
Criteria to classify a delivery as failed or successful is configurable
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OOS-1 ACTION
Criteria to classify a delivery as failed or successful is configurable
Current Status
Warehouse: Alarm
Fleet: OK
− Executive Dashboard for Real Time tracking and managing Warehouse and Fleet health
− Real time indicators for OOS Warehouses and Fleets
− Relevant Action Items as per the Out Of Specification (OOS) observations
− Further Analysis: Drill down to individual deliveries, routes and notifications/orders created for resolution
Real Time Warehouse and Fleet Health Monitor
Health monitor
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− Executive Dashboard for Real time tracking of deliveries on the way
− Real time indicators for OOS warehouses and fleets
− Relevant Action Items as per the out of specification (OOS) observations
− Further Analysis: Drill down to individual deliveries, routes and notifications/orders created for resolution
Real time delivery tracking dashboard
Health monitor
Customer
Material
Period
Third Party Logistic Vendor
Warehouse ID
Selection Criteria
Notification/Message
Alerts
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− Executive dashboard for customer level analysis
− Failed deliveries due to non compliance of environmental parameters during storage or transportation
− Relevant action Items as per the out of specification (OOS) observations
− Drill down to customer level for further analysis
Failed delivery analysis by customer
Analytical Reports
By delivery count By cost for failed deliveries
Criteria to classify a delivery as failed or successful is configurable
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Real Life
What are some tactics that companies are employing to drive their business strategy through Digital Supply Networks?
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Design Process Optimization: Sensor/Data-driven Design EnhancementsCaterpillar has a fleet of mining trucks that operate autonomously, 24 hours a day. The machines are embedded with sensors that transmit information on oil pressure, filters, and other truck components via wireless connections back to headquarters. When compiled over time and analyzed, the data can help engineers design heavy equipment that can accomplish more work with fewer passes - leading to reduced idle time, less operator fatigue, and lower fuel consumption
Impacted Supply Chain Areas
Differentiators
Speed Service
Agility Innovation Quality
Cost
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Product Optimization: Make-to-Use with 3D PrintingThe commercial aerospace and defense industry is using 3D printing for concept modeling and prototyping, printing low-volume complex aerospace parts, and printing replacement parts. Potential future applications include printing aircraft wings and complex engine parts and printing repair parts on the battlefield, thus cutting out the traditional design, manufacturing, and distribution steps
Impacted Supply Chain Areas
Quality
Cost
Differentiators
Agility Innovation
Speed Service
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Product Optimization: Ultra-delayed DifferentiationCoca-Cola’s Freestyle soda machine allows users to select from mixtures of flavors of Coca-Cola branded products which are then individually dispensed to create custom flavors. This “make-to-consume” model can replace slow-moving inventory on shelves, reduce distribution and logistic costs as water volumes in shipments are minimized, and enable integration with retailers
Quality
CostSpeed
Agility
Service
Innovation
Impacted Supply Chain Areas
Differentiators
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Supplier Collaboration: Analytics-driven SourcingTesco uses predictive analytics and meteorological data to anticipate future consumer-buying needs by product and by store (e.g., people buy more ice cream on hot days) and work with suppliers to source those items quickly. This analysis saved them ~$140 million through reduction of wasted stock
Quality
Speed
Agility Innovation
Cost Service
Impacted Supply Chain Areas
Differentiators
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Operations Efficiency: Augmented Reality-enhanced OperationsEasyJet uses augmented reality smart glasses to enable two-way communication between its network of remote maintenance technicians and the central engineering team. The streamed information provides an accurate view of the situation, and enhancements like QR code part scanning allow the software to automatically push relevant information. Step-by-step walkthroughs enable technicians to perform complex maintenance and reduce downtime, achieving an estimated $500,000/year in savings from fuel costs alone by eliminating travel for its central engineering team.
Quality
Speed Service
Agility
Cost
Innovation
Impacted Supply Chain Areas
Differentiators
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Logistics Optimization: Automated LogisticsWalmart is developing drone technology to replace the jobs of inventory quality assurance employees and aims to cut inventory checks in all of their massive distribution centers from one month down to a single day. Walmart is collaborating with the Federal Aviation Administration on the autonomous quad-copter done (roughly 3 ft by 3 ft), which can take 30 images per second from a top-mounted camera. The camera is linked to a control center and scans for tracking number matches. Matches are registered as green, empty spaces as blue, and mismatches as red
Quality
Speed Service
Agility
Cost
Innovation
Impacted Supply Chain Areas
Differentiators
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Sales Optimization: Sensor-driven Replenishment PushesConsumer product companies are using Amazon Dash to sense demand and drive replenishment sales at the precise point of consumption. By gaining visibility into customer usage patterns, Amazon can improve their demand forecast accuracy and plan for more economical and efficient transportation routes. Amazon Dash shortens CPG supply chains and places goods in the hands of their customers faster
Parent Brands & Categories using Amazon Dash
Nu
mb
er
of
Cate
go
rie
s
Number of Brands
1
1
2
2
>5
>5
Quality
Cost
Agility Innovation
Speed Service
Impacted Supply Chain Areas
Differentiators
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Aftermarket Sales & Services: End-to-end Transparency to CustomersStonyfield has launched an interactive Source Map on their website to provide their customers with full supply chain transparency. Customers can view farmer profiles, see images of the actual farms, and view in-depth videos of ingredients like bananas and blueberries to better understand the source of their yogurt ingredients
CostSpeed
Agility Innovation Quality
Service
Impacted Supply Chain Areas
Differentiators
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