Supply Chain Management 4.0

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1 Supply Chain Management 4.0 The AI & IoT Business Smartization Barcelona, June 6 th, 2018 Jorge Calvo, PhD

2 Jorge Calvo, PhD Deputy Dean, Professor and Independent Strategic Advisor based in Tokyo, with 33 years global executive experience in Corporate Strategies for Digital Business Transformation. Deputy Dean and Faculty of Strategy, Industry 4.0, Operations Strategy and Business Research at GLOBIS University Graduate School of Management, Tokyo, Japan (Biggest Business School in Japan, with 800 MBA students and top ranked student s satisfaction). Associate Professor of Business Transformation IoT & Enabling Technologies, ESADE Business School, Barcelona, Spain. Board Director at Japanese Operations Management & Strategy Academic Association. Senior executive background: President Global Supply Chain Management Division, Roland DG Corporation Japan ( ). President & CEO, Roland DG EMEA ( ). President & CEO, Roland DG Iberia ( ). & Kurzweil 2

3 SCM 4.0 Cyber Physical Value Chains People & Machines Working in Sync 3

4 The Digital Economy is Data & AI Driven Top largest market capitalization companies are Digital & AI Driven Enterprises 2 are Pure Logistic Experts 1. Apple $ BB ( 33.5% YOY) 2. Alphabet $ BB ( 22.3% YOY) 3. Microsoft $ BB ( 37.7% YOY) 4. Facebook $ BB ( 34.6% YOY) 5. Amazon $ BB ( 21.3% YOY) 6. Berkshire Hathaway $ BB ( 30.6% YOY) [ 25% Tech] 7. Alibaba $ BB ( 70.7% YOY) Kurzweil 40 of companies are dying

5 The VUCA Economy & SCM Competences Agility Adaptability Alignment Kurzweil 5

6 The VUCA Economy & SCM Competences Connecting Sensing Automating Kurzweil 6

7 The Business Smartization: Data is the new petrol The ability to apply AI & IoT & Enabling Technologies to enhance and even automate, processes, operations, real time decision making, reinvent business models, services and ecosystems, and remake the smart customer experience. 7

Linking the new idea of RFID in P&G s Supply Chain to the thenred hot topic of the Internet.

8 Connecting & Sensing The Supply Chain Internet of Things (IoT) was born for the Supply Chain Management: Coined by Kevin Ashton: as the title of a presentation I made at Procter & Gamble (P&G) in Linking the new idea of RFID in P&G s Supply Chain to the thenred hot topic of the Internet. Human Machine Interfaces: Virtual Reality (VR) Augmented Reality (AR) Conversational Systems (Chatbots) Sensors (GPS, Temp. etc.) Kurzweil 8

9 Automating the Supply Chain Artificial Intelligence (AI) Advanced Analytics Smart Things Smart Mobility: self driving cars & trucks, drones Robots 3D Printing Blockchain Kurzweil 9

10 The Internet of Everything & Everywhere Cisco Consulting Service Kurzweil 10

Number of IoT Devices in Use 2018 o 500 BB IoT devices 2020 (Cisco) 2025 500 Billions 2018 20 Billions o $11 TT IoT

11 Number of IoT Devices in Use 2018 o 500 BB IoT devices 2020 (Cisco) Billions Billions o $11 TT IoT Economic Impact 2025 (McKinsey) o $1,9 BB Economic Value Added 2020 (Gartner) o $7,1 TT IoT Solutions sold 2020 (IDC) 11

12 Don t go alone: Join AI & IoT Platforms Advances in Artificial Intelligence will transform modern life by reshaping science, industries, transportation, health, business, finance, and the military: AI (Watson) is 90% accurate in making treatment decisions in Early Stage Lung Cancer, professionals 50%. Self driving cars are now safer than their human drivers. And the more data they gather, the greater their precision in decision making. Available and affordable to SME as Outsourced Business Process: Ibm.com 12

13 Industry 4.0 implementation by function Japanese industrial companies are both product and productionoriented in regard to Industry 4.0. Levels of implementation of Industry 4.0 are relatively low The level of the management culture has a significant influence. The gap of company total : total commitment of the company as a whole is significant between two groups. Michiya Morita, Jorge Calvo & Yukari Shirota (2016). Envisioning Supply Chain Management 4.0: The view from Japan. CSCMP's Supply Chain Quarterly [QUARTER 3/2016] Groups are classified according the Absolute Supply Chain Orientation Strategy (ASCOS) methodology, Morita et al. (2015). 13

14 Current implementation of enabling technologies Japanese industrial companies like automation but are afraid of the risk inherent to the Internet There is a consistent focus on operations management: 1. Autonomous robots 2. Simulation 3. Additive manufacturing (3D Printing) Michiya Morita, Jorge Calvo & Yukari Shirota (2016). Envisioning Supply Chain Management 4.0: The view from Japan. CSCMP's Supply Chain Quarterly [QUARTER 3/2016] Groups are classified according the Absolute Supply Chain Orientation Strategy (ASCOS) methodology, Morita et al. (2015). 14

15 Vision toward Industry 4.0 Highly strategic incremental and organizational vision, as the link between people and processes that enables completely new strategic scenarios and business models. Industry 4.0 presents more opportunities than risk. Industry 4.0 won t become established as the industry standard in the future. Michiya Morita, Jorge Calvo & Yukari Shirota (2016). Envisioning Supply Chain Management 4.0: The view from Japan. CSCMP's Supply Chain Quarterly [QUARTER 3/2016] Groups are classified according the Absolute Supply Chain Orientation Strategy (ASCOS) methodology, Morita et al. (2015). 15

16 Key Success Factors in SC Smartization Projects Connecting the World of Big Data (Companies only use 4% of data available) Capturing Internal Data: Access to Real Time Data Capturing External Data: Access to Clients, Partners, Suppliers Business Ecosystem Data Decision Making Process Oriented Predictive Prescriptive Competitive SC Core Competences Lean Operational Efficiency (QSCT) Agile Planning Kurzweil 16

17 Decision Making Process Advanced Analytics in SC START HERE PLAN AUTOMATE SMART Kurzweil 17

18 How AI is driving benefits across the organization Kurzweil 18

19 Companies Observed +10% Benefits by AI Implementation Source: Capgemini Digital Transformation Institute, State of AI survey, N=993 companies that are implementing AI, June 2017 (1000 companies implemented AI). Kurzweil 19