the digital transformation journey of the supply chain
TRANSCRIPT
The Digital Transformation Journey of the Supply Chain
M. Dave Malenfant
Director, Outreach and Partnerships, Center for Supply Chain Innovation, Neeley School of Business
Executive Vice-President, Industry Liaison & Talent Development, BSMA Executive Supply Chain Leader|Consultant|Mentor
February 13, 2019
Developmental Transitional Transformational
• Improvement of the current state over time and gradually
• Current to future state to fix a problem in the current state
• Requires management of the change process from current to future state
• Fundamental changes to strategy or operations
• Future state requires a shift in culture, behaviors and mindset as well as organizational changes
• Digitization of the business
Types of Change
1. The Supply Chain Defined 2. The Digital Supply Chain 3. Trends towards a Digital Ecosystem4. Leading trends and Drivers of Digitalization5. Putting all together –Digital Maturity 6. The New Digital Supply Chain Defined
Today’s Journey
How Do you Define Your Supply Chain?
The Innovative Integrated Supply Chain
The Customer is integral to the Supply Chain
Supply chain is integrated in the operations and business strategy
Integrated Performance metrics across the supply chain
Including Customer Satisfaction
We do a great job with suppliers in our Traditional model
But, how are we managing sustainability and Quality
How Do you Define The Digital Supply Chain ?
SENSINGfrom responses to history, to sensing demand
PULLfocus on customer linkage and market opportunities
HORIZONTALflow from supplier’s supplier to customer’s customer
QUICK, REPONSIVEfrom “batch” to cadence with all links in the supply chain
NETWORK RESPONSEfrom “enterprise applications” to network sensing and adaptation.
Digital Supply Chain Defined
Source: Supply Chain Shaman – Lora Cecere
Source: https://www.rti.com/industries/iot-faq.html
The Digital Supply Chain
Intelligent Supply Chain
Visibility- Standardizing- Sensing- Capturing- Connecting- Filtering- Combining
Analytics- Structuring- Visualizing- Diagnosing- Predicting- Prescribing- Cognifying
Responsiveness- Sharing- Messaging- Automating- Reacting- Proacting
Inter/Intra Organizational Integration- Systems - Structure - Roles
Sense
Analyze
Predict
Respond
Intellectual Capital- Talent - Knowledge - Skills
IoT
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The Digitization of the Supply Chain
Trends Towards a Digital ecosystem
Trends Towards a Digital ecosystem
Innovation Trends when in Their 20’s
Trends Towards a Digital ecosystem
Trends Towards a Digital ecosystem
Why are these trends occurring ?
Trends Towards a Digital ecosystem
Trends Towards a Digital ecosystem
Trends that require a Digital Journey
Trends Towards a Digital ecosystem
Key Trends that Will Require Digitalization
Key trends that will impact the Industry.
• Continued double digit growth in e-commerce is impacting freight decision making
• Customer Servitization is impacting expectations of ALL carrier performance• Digital transformation by shippers will impact relationships with carriers• Complexity of markets and servicing all channels is driving for more integrated
services.• Continued need for speed
Technology Factors that will Require you to Change
There are 4 high level evolving technologies that are going to impact the industry
Source: Derek Kaufman, managing partner of Schwartz Advisors
1. Machine Learning and Artificial Intelligence• Apply to large amounts of data to meet shorter fulfillment horizons and adapt to
predictive and prescriptive Analytics
2. Blockchain• The start of BiTa and other “use” cases will accelerate in 2019 – although slow
3. Autonomous Trucks and Platooning• Autonomous Truck technology will be combined with platooning technology
4. Digitization of the Transportation Industry• All aspects of the industry will move towards digitization
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Investments in Disruptive Technology
There is a trend in venture Capital Funding of new Technologies in Transportation and Supply Chain.
Source: Matt Snider, Manager, applied Knowledge
1. Freight Tracking and Visibility Platforms• Real-Time, on demand tracking – driven by Telematics (like ELD)• “Track and Trace services through IoT.
2. On –Demand Apps• Developing an “app” to do “one click” booking and tracking• Digitization the “negotiations” – all without human interaction
3. Risk Management Technology• On Board video technology.• Virtual Reality and Augmented Reality
4. Digitization of the Transportation Industry• Data consolidation, predictive analytics to determine supply and demand• Geo-mapping for route optimization.
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Top Digital Trends for Transportation and Supply Chain
1. Analytics2. AI | ML | VR3. IoT4. Robotics (RPA)5.Cloud Computing6. SaaS7. Drones 8. Blockchain9. 3D printing10.Uberization 11.Autonomous Vehicles12. Cybersecurity
Analytics• Predictive analytics• Prescriptive analytics
Agile• Must have flexible and interactive supply chain• Ability to cope for unforeseen events with quick decision-making.• The new “lean”
Artificial Intelligence (Machine Learning)• This is going to have the greatest impact on Supply Chains• Able to learn from unstructured data. • Virtual fulfillment systems are developing across retail.• Adoption of cognitive solutions (such as Watson) is going to be
significant in 2019 – especially in predicting transportation movement
Drivers of the Digital Enterprise & Supply Chain
Blockchain• Perhaps, the most disruptor in business• Walmart is implementing • Current supply chains and businesses are
inefficient due to manual paperwork delays
Drivers of the Digital Enterprise & Supply Chain
• Leapfrogs EDI and API’s • Speed up transactions
• Eliminate efforts and manpower that goes into reconciling events• Verify transactions as they occur
• Will become essential in transportation and sourcing
3D Printing• Growing exponentially
Uberization• Growing everywhere• Nordstrom, Amazon, Costco, Walmart, Whole
Foods• 33% adoption to Uberization.
Cloud Based Computing• Used to be considered disruptive. • Now becoming the only acceptable means • especially in CPG and Retail.
Some Other Drivers of the Digital Enterprise & Supply Chain
DRONES Are In Full USE
Can You Imagine
Can You Imagine
Can you Imagine?
All Vehicles will Be Autonomous
Putting this Together You Need to Start Your Digital
Transformation
WHAT IS YOUR SUPPLY CHAIN DIGITAL MATURITY?
Leveraging digital technologies and partner ecosystem will deliver value-added customer offerings
Stage 1: Predictable Supply Chain – the supply chain has limited digital capabilities
Stage 2: Digital Supply Chain Functions – Digital technologies (e.g. IoT, 3DP, cloud, analytics) support functional improvements
Stage 3: Digital Supply Chain – Digital technologies support performance improvement across integrated supply chain
Stage 4: Digital Value Chain – Digital technologies support the extended supply chain to offer differentiated customer fulfillment
Stage 5: Digital Ecosystem – Digital technologies support the creation of value through new customer offerings in a partner ecosystemSource: Gartner September 2017
Where are you in the Maturity Model?
Key Business Trends driving Your Digital Supply Chain Transformation
Aspirational will be reality tomorrowASPIRATIONAL• By mid 2019,, one-third of companies will be disrupted by digitally enabled competition
having better supply chain capabilities
It’s all about the consumerCONSUMER• Digital transformation in supply chain is all about better products and better service
Size doesn’t matterSIZE• Successful supply chains are about agility and real-time adaptability, NOT size• Smaller “lateral” competitors with digital capabilities will take 10-15 share points away from
traditional established companies
Exemplifying a tightly integrated 5C approach5C APPROACH• Connected with IoT, Comprehensive Analytics, Cognitively Enabled, Collaborative,
Cyberware
Real-time and Collaborative VS. Static and SiloedREAL-TIME• Accelerating innovations will require supply chain capabilities to be dynamic with real-time
data access enabled without complications of siloed systems.
Technologies enabling the digital supply chain
Core Attributes of digital supply chains
Areas of Opportunities for Digital Transformation
In Order for Our Digital Supply Chain to Work
Data Driven and Technology enabledGreenFast
FlexibleGlobal
Proactive
Our Supply Chains Must Be:
The necessary for a Digital Supply Chain –NO longer a linear supply chain
Integrating the customer and demand sensors throughout the integrated supply chain
The Networked Circular Digital Supply Chain
Supply Chain Design
Supply Chain Planning
Supply chain execution
SupplyChain Control Tower
Suppliers
Manufacturing
LSPs
CustomersConsumers
Resellers
Academics R&D
Consumers
SuppliersCustomers
Demand aware Supply visible
Digitally connected
1. A supply chain that is data driven, demand aware and digitally executed
2. With visibility, resiliency and robust analytics as underlying principles
All routings will be
digitally executed
Visibility Dimensions for Success
Change Drivers in Supply Chain Management
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The Supply Chain
TechnologyConnect and collaborate.
In real time, around the globe.
TransportationManufacturing to Warehouse
Manufacturing Plant
TransportationWarehouse to Customer
Sales Info
ForecastingSystems
Host / ERPOMS
TMS
AdvancedPlanningSystem
ManufacturingExecution
System
EDIInternet
EDIInternet
RFDC or BarcodeScanner or Pager
Warehouse(WMS)
Warehouse(WMS)
EDIInternetRFDC
RFDC RFDC
EDIInternetor RFDC
EDIInternetor RFDC
RFDC or Pager
Supply ChainVendors
Host / ERPEDI
Internet
EDIInternet
Headquarters
Scanners
Retail CustomersWith POS Scanners
ExchangePortal
POSScanner Data
YMSYMS
GlobalizationNew markets. New sources
of low-cost goods and services.
SustainabilityDoing well by doing good.
Value ExtensionRight product.
Right place. Right time.
In Summary
The speed of transforming your supply chain ecosystem to a digital business and supply chain depends upon your understanding of:
Drivers leading to digitization of the supply chain
The impact of AI, VR, Digital Technology and analytics on your supply chain
The speed of digitization and how it impacts the transformation of the supply chain
Integration of demand sensors from customer’s customer to supplier’s supplier into all links of the supply chain.
NEVER GIVING UP ON CHANGE
In Summary
Conclusion and Questions
M. Dave MalenfantDirector, Center for Supply Chain Innovation, Neeley School of BusinessExecutive Vice-President, Industry Liaison & Talent Development, BSMA
Executive Supply Chain Leader|Consultant|Mentor
[email protected] Phone: 817-257-7551Mobile Phone: 817-228-4964
www.linkedin/in/davemalenfant
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