enhancing visibility through supply chain control tower · advanced analytics across processes...

© 2018 IBM Corporation

Mehtab Gilani

IBM Global Business Services (GBS)

Watson IoT & Industry 4.0 Practice Area Lead

Chemical & Petroleum (C&P)

Enhancing Visibility through Supply

Chain Control Tower

2

84% of CSCOs say

lack of visibility is their biggest challenge

Source: IBM IBV Global Chief Supply Chain Officer Study

3

That lack of visibility comes with a price:

1 in 3 companies report losses of $1M+ annually due to disruptions

Source: Supply Chain Resilience Report

4

The Data Challenge: Hindering Visibility

Cognitive Supply Chain

Unstructured/Dark Data Sources

No View

Social

Weather

NewsWMS ERP

Siloed Internal Systems

Siloed View

TMS

Limited View

Partner Network

Partner Supplier

Client

5

The Next Generation Supply Chain will be driven by insights, and orchestrate digital processes end-to-end


Linear today Digital future

Integrated Planning

Intelligent Assets

Analytics

Driven

Intelligence

+

Value Chain

Visibility

Customers

And

Consumers

Suppliers

and

Service

Providers

Order

Status

Fulfill

Order

Status

Fulfill

Sch

ed

ule

Sta

tus

Con

firm

Pla

n

Sta

tus

Dem

an

d

Advantaged

Back

Integration

Market

Awareness

& Customer

Intimacy

Source: IBM Institute of Business Value

6

Supply chain is a natural fit for AI



7

Digital transformation helps address key Supply Chain challenges

7

Optimising inventory holding through usage and capability analysis

Optimizing supply chain and capital usage

through secure transactions

Leveraging insights to drive safe, efficient and

effective operations

Providing visibility to reduce disruption and mitigate supply chain

risks

Improving asset utilization through

location and condition tracking

Cloud & Data IoT Cognitive Blockchain

88

More of the most effective organizations view digital technologies as highly important to their supply chain strategy

Adopting digital technologies in the supply chain

Importance of technology trend to enterprise’s supply chain strategy

Cloud computing

62% 95%

Internet of Things

Predictive analytics

Machine-to-machine connectivity

Artificial intelligence / cognitive computing

Mobile technologies and applications

RFID / location technologies

63% 91%

48% 85%

19% 80%

22% 74%

27% 74%

22% 54%

Most effective chemicals

supply chain organizations

All others


9

The leaders view digital technologies as critical to addressing the supply chain imperatives


Impact of technologies on supply chain imperatives – Most effective chemicals supply chain organizations

(Percentage of respondents selecting)

Imperative

Predictive

analytics

Cloud

computing

AI /

cognitive

computing

Internet of

Things

Machine-to-

machine

connectivity

Mobile

technologie

s

RFID /

location

technologie

s

Improve demand forecasting 74%

Enhance supply chain collaboration 94% 72% 97% 59% 44% 93%

Improve supply allocation and distribution decisions 73% 45% 72% 62% 52% 73% 65%

Integrate financial, sales, and operational planning 95% 52% 69% 61% 68%

Determine unplanned event scenarios 81% 34% 45%

Manage material quality and risks 83% 38% 90% 65% 44%

Increase analytics around supply chain data & costs 45% 63% 59% 55% 41%

Increase real-time visibility into operations 67% 89% 40% 91% 81% 89% 76%

Manage transportation disruptions 67% 48% 94% 60%

Improve service responsiveness 48% 83% 41% 52% 47% 89%


10

An integrated and holistic perspective is necessary in order to maximize value capture from the overall supply chain transformation opportunity


Financial & Performance Management

Information

Technology

Business / Business Unit

Strategy

Logistics

Network

Supply Chain

Strategy & Policies

Strategic Sourcing &

Supply Capability

Planning & Inventory

ManagementSupply & Supplier

Management

Transportation & Distribution Management

Supply Chain Integration / Integrated Operations Planning

People, Organisation &

Culture

Business Rules,

Processes

STRATEGIC SUPPLY INFRASTRUCTURE

SUPPLY CHAIN INTEGRATION

OPERATIONAL PLANNING & EXECUTION

KEY ENABLERS

STRATEGIC DIRECTION

Aligned Strategy

• Customer segmentation

• Service requirements

• Capabilities supporting value

delivery

Aligned Structures

• Channel / supply chain

segment design

• Products and value

proposition that make a

difference

Aligned Functions

• Excellence in planning and

execution

• Effective supply chain

integration and collaboration

Aligned Operations

• Processes, organization,

people, business rules,

incentives and systems

• Roles, relationships and

accountabilities

What you want to achieve

How you will get there

• Differentiation in cost effectiveness and customer

service levels in delivering product to customers

• Integrated planning with key

suppliers and customers to maximise

responsiveness and manage costs

• Organisation, capabilities and the

culture that will bring it alive

• Effective processes and disciplined

performance management to ensure

value is delivered

• The technology to enable effective

management, control and execution

What it will look like• The operating model which will realise your

proposition

• The products and value proposition that will

differentiate your services

• The network that will enable you to deliver most

efficiently

11

Technology trends such as Industry 4.0 provide the building blocks for Next Generation Supply Chain Transformation


Enterprise Process Framework (EPF)

Industry 4.0 Digital Building Blocks

Next Generation Supply Chain

Integrated Planning

Category Management/Buy Optimization

Macro and Micro Forecasting

Adaptive Supply Chain Modeling

Dynamic Deployment

Integrated Business Planning

Intelligent Assets

Plant Performance Optimization

Asset Management

Predictive Maintenance

Predictive Quality/Warranty

Continuous Engineering

Energy Optimization

Worker Safety Management

Value Chain Visibility

Cognitive Resolution Rooms

Data Driven Compliance

Supply Risk Identification

Trading Partner Management

Storage/ Inventory/ Shipment Tracking

Procurement Intelligence

Intelligent Transactions

Weather

Forecasts

Tank TelemetryCustomer

BehaviorsLocal Events

Competitor

Disruptions

Micro and Macro

Economics

Past Issue

Resolutions

Market

Movements

Strategies and

Tradeoffs

Weather &

Labor Outages

Instrumented

Transportation

Instrumented

Manufacturing

Social Media/

Text Analytics

Blockchain

Ledger

Mobile

EngagementBlockchain

Contracts

Plan Manage Control

12

Next Generation Supply Chain capabilities offer the promise to dramatically improve Get it Right performance by improving end to end visibility and analytics enabled decision support



Order

Production

Fulfillment

Delivery

Consumption

Forecast

Purchase

Cognitive forecasting tool

projects product trends

using internal and external

data and news

Exogenous data, analytics, IoT

and Sensors detect potential

issues with goods in transit

Cognitive Order Management

provides prescriptive order commits

based on delivery options and

predicted customer behavior

Dynamic Scheduling: Real-time

connection between incoming orders

and production schedule reduces lead

times and inventory

Smart Storage Devices at

customer sites notify ChemCo

when materials are consumed (or

not)

Blockchain-enabled supplier

visibility and purchasing

improves responsiveness

and surety of supply

Smart Storage Devices and

analytics improve picking decisions

and overall inventory quality

Future supply availability

Demand signals

Delivery confirmations Right product, right documentation

Near-term production completions

Demand trends to buy into Real-time order feed

Customer

13

Supply Chain – Virtual Command Centre


14

Supply Chain – Real-Time Responsiveness


15

Supply Chain Visibility


Piloting a platform that uses blockchain technology to track the shipment of goods

“provide information about the position and movement of goods within the supply chain”

Management and tracking of the transactions required whilst moving tens of millions of shipping containers around the world

Source: https://enterprisersproject.com/article/2016/8/how-monsanto-approaching-iot-ground

Monsanto leverages IoT data

in planning, in logistics, in the

supply chain, and at the

commercial level

16

The entire supply chain ecosystem will share a single trusted view of shipping events and can participate in paperless trade


17

Improve info

exchange with

partners

Transparent,

agile supply

chain

Supply Chain OptimizationB2B Collaboration

B2B

Integration

Software

Managed

File Transfer

Software

Supply

Chain

Business

Network

DMPCRM LogisticsSCMWMS SupplyDSP Data Mart POSERP Weather

Supply

Chain

Insights

Supply

Chain

Business

Network

Order

Management

Exception mgmt.

SLA performance

Synch systems

Scale connections

Availability

Optimize transactions

Connect suppliers

Manage disruptions

Collaborate / take action

Visibility & Insights

IBM Watson Supply Chain Portfolio…

18

Asset Performance Compared to Inventory Practices - Key Takeaways

MRO Inventory Optimization

12.9%

5.6%

7.7%

3.0%

3.3%

0.% 2.% 4.% 6.% 8.% 10.% 12.%

0

1

2

3

4

Avg. Downtime from Lack of Spares, Stock Outs

# o

f C

ust

om

er

Ro

les

Avg. Asset Downtime vs. Number of

Inputs from Reliability & Maintenance

6.5%

3.7%

0% 2% 4% 6% 8%

No

Yes

Avg. Downtime from Lack of Spares, Stock Outs

Sp

eci

aliz

ed

In

v. T

oo

l? (

Y/N

)

Avg. Asset Downtime vs. Utilization of

Specialized Inventory Optimization Tool

Source: Inventory Optimization: A Cross-Industry Comparison of Practices and Performance – August 2017 Survey (Scottmadden)

1919


Materials

Criticality

Analysis

Service Level

Analysis

Inventory

Performance

Visibility

Risk Based

Cost Analysis

Shared

Inventory

Optimization

Surplus &

Obsolete

Analysis

Acting on

the highest

value

spaces

30%Reduction in MRO

Inventory Costs

50%Reduction in

Unplanned Downtime

2020


Focus: Powerful Outcomes

Business Unit

Visibility

Configurable to provide

visibility into distinct

business units based on

specific business goals

and modes of operation

Best Practice

Retention

Ingestion of historic

data, addition of best

practice and results of

actions taken.

Knowledge transfer and

protection in system

cutovers

Supplier

Performance &

Bad Actors

Lead time and service

level analysis identifies

suppliers and

employees applying sub

optimal inventory

processes

Data Quality

Visibility

Highlight gaps and

errors in current

inventory data

provides guidance on

how to address gaps

21

Closed-Loop Optimization ProcessMRO Inventory Optimization

IBM MRO Inventory

Optimization

22

Success Story: Major Oil & gas Company

• Reduced MRO working capital by 10% in

six months at one site alone

• Lowered inventory levels by at least 10% three

years in a row

• Savings at Alaska site funded global implementation

• Achieved 10’s of $$millions in savings

InventoryLevels

Reduced by

10%

23

Select the right use cases

Digital Supply Chain

Supplier Available To Promise

Supplier Available To Ship

Supplier On Time Ship

Supplier On Time Delivery

Procure to Pay / Inbound

Supply

ShortageWeatherProduction

DelayLabor Dispute Supplier

Over CommitDelayed

delivery

Quality parts

issueDemand Spike

Carrier DelayCatastrophic Alert

Supplier FinancialsUnscheduled Order

24

A digital supply chain

collects, connects, and

consumes real-time signals

and information for

operational agility and

flexibility. New data sources

can provide insight and

automate action.

Create supply chain

processes that think

Ready your digital

skillset

Uncover new

intelligence


optimizes processes within

the enterprise and across

ecosystems. Infusing

advanced analytics across

processes enhances

decision making.


requires new ways to work.

Employees need to be

equipped with analytical

and problem-solving skills.

Data management, analysis

and visualization form the

basis for a digital

competency.

Getting to a digital supply chain

Recommendations

24 Source: IBM Institute of Business Value

enhancing visibility through supply chain control tower · advanced analytics across processes...

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