The new technological paradigms are changing the market scenarios influencing both consumers behaviours and business models

Transcription

1 The new technological paradigms are changing the market scenarios influencing both consumers behaviours and business models Alessandro Perego Direttore Scientifico Osservatori Digital Innovation Ordinario di Logistica e Supply Chain Management School of Management Politecnico di Milano Direttore Dipartimento Ingegneria Gestionale, Politecnico di Milano Boost your business network Build your collaborative ecosystem May the 18 th 2018

2 What is the effect of the digitalization of the «world» on Supply Chain Management? Is the «new digital Supply Chain Management» a more complex or an easier challenge than the «old digital Supply Chain management»?

3 The new «wave» of Digital Technologies CLOUD COMPUTING BIG DATA ANALYTICS DIGITAL OPERATIONAL TECHNOLOGIES BLOCKCHAIN INTERNET OF THINGS ARTIFICIAL INTELLIGENCE Accessibility Computing power Unstored storage Data Management Massive Analytics Data Driven Approach On demand + 3D printing New Human-Machine Interfaces Collaborative Robots Guarantee of execution Indisputability Traceability New models of control and management Sensors Economy Pervasive Automation Language and Image Recognition Machine learning Data-driven optmisation Paradigm 4.0 «wave»

4 Supply Chains & Supply Chain Strategies Demand-side uncertainty Supply-side uncertainty Demand-side Supply-side uncertainty Number, Main Factors uniqueness, localization of suppliers Stability Product of variety the supplier base Consumer demand volatility Duration of supply contracts % Sales induced by promotions/discounts Level Price of elasticity dependency on the supplier base Number Price fluctuations of echelons in the upstream supply chain Financial Product performance life cycle (length of suppliers and position in the curve) Rate of Introduction of new products Country risk of suppliers Risks of Obsolescence Maturity Number level and characteristics of processes and of technologies the market segments Product Intensity complexity/number of Competition in of the components market Quality Number level of echelons required in the downstream supply chain Technological evolution of materials Importance of time-to-market New markets/new channels

5 Supply Chains & Supply Chain Strategies High Low Low Demand-side uncertainty High Supply-side uncertainty Supply Chain Uncertainty

6 Supply Chains & Supply Chain Strategies Lean (efficient) Supply Chain The Lean Supply Chain strategy aims to maximize the expected Return On Assets (ROA) creating both cost and value competitive advantages Responsive Supply Chain The Responsive Supply Chain strategy aims to mitigate risks (related to the changes and the diverse needs of the customers) on the demand-side Risk Hedging Supply Chain AGILE Supply Chain The Risk Hedging Supply Chain strategy aims to reduce risks in supply disruption U The Agile Supply Chain aims to reduce risks on both the supply and the demand side, combining Risk Hedging and Responsive Supply Chain strategies

7 Rephrasing the questions using the new lenses What is the impact of new digital trends on Supply Chain Uncertainty? What is the impact of new digital trends on Supply Chain Strategies?

8 Rephrasing the questions using the new lenses Are new Digital Technologies in Supply Chain Management What is the impact of What is the impact of Complexity/Uncertainty new digital trends on Solution new digital enablers trends on Supply Chain uncertainty?? Supply Chain Strategies?

9 What is the impact of new digital trends on Supply Chain Uncertainty? New digital trends are increasing both Demandside and Supply-side Uncertainty Increasing Supply Chain uncertainty

10 On the Demand-side blurring the boundaries between industries

11 On the Demand-side increasing customer service expectations

12 On the Demand-side reducing information asymmetry between manufactures and customers ( transparency)

13 On the Demand-side pushing towards mass customisation

14 On the Demand-side reducing product life cycle (software-defined life)

15 On the Demand-side new direct (but actually indirect?) channels

16 On the Supply-side pushing towards global supply (or very local nonindustrial supply)

17 On the Supply-side changing the way products are made

18 On the Supply-side new materials and different relevance of components in the bill of materials

19 On the Supply-side increasing the competition from everywhere

20 Rephrasing the questions using the new lenses What is the impact of new digital trends on Supply Chain Uncertainty? What is the impact of new digital trends on Supply Chain Strategies? Are new Digital Technologies in Supply Chain Management Complexity/Uncertainty? Solution enablers

21 What is the impact of new digital trends on Supply Chain strategies? New digital trends are powerful enablers of «agile», responsive, risk-hedging strategies

22 Bio-marketing to «feel» customers A new human-oriented idea of Marketing. Not only Big Data but heart beat, breathing, eye-tracking to reveal consumer behaviours and preferences «Wi-Fi Blutooth Smart Scale rich of functions (Fat%, Body Volume, ) Survey: very good acceptance Real expertiment on 120 students with meaures of skin conductance and heart beats using wearables reveals that many are uncomfortable because sensible data cluld be shared across the network From expected blockbuster to fitness-maniac product» (Polimi Pheel-Physiology Emotion Experience Lab)

23 Artificial Intelligence for Demand Planning A new set of tools based on Artificial Intelligence and Machine Learning to understand the drivers of customer demand Sales forecasting in the retail industry Machine learning model, which undercovers the hidden relationships between sales and a relevant number of hundreds of explanatory variables (past sales, point of sales, promotions, prizes, weather conditions) Payoff: high accuracy, more control over the forecasting process, better understanding of the root causes explaining sales, optimal management of peaks and downs of demand

24 On-Demand Manufacturing Manufacturing as a service, i.e. decomposing the manufacturing process into manufacturing/design services and a simulation engine Job Shop Virtualization Customer sends an RFQ directly via web Analysis of BOM and production cycle, real time simulation Immediate feedback 24x7 on prices and expected delivery dates Automatic order release and scheduling if the customer accepts the proposal

25 Control Towers for Supply Chain Visibility Maturity Model for Control Towers: from visibility to alerting to autonomous response and learning Increasing complexity in Supply Chains (purchasing, manufacturing and distribution) is forcing companies to seek for new IT solution to integrate data coming from internal IT systems and from IT systems of external service providers

26 IoT-enabled Supply Chain Visibility Massive application of item-level auto-identification to increase the control and visibility of the flows all along the Supply Chain Retailer in the sports sector Application at the production stage of RFId tags on all products for all shops and 100% of the volumes Benefits: reduction of POS costs (check-out, inventory control, shrinkage), supply chain costs, increase in sales (reduction of outof-stocks), trackability along the chain

27 Artificial Intelligence for Supply Chain Planning A new set of tools based on Artificial Intelligence and Machine Learning to manage the frequent (re)planning of complex Supply Chains Leading food manufacturer Optimization of the logistic system is a large-scale mixed binary optimization model. The model can be solved within a short computing time, in the range of a few seconds or at most a few minutes, due to an ad-hoc algorithm for its approximate solution Benefits: performance (frequency of update) and job enrichment of planners

28 Cloud-enabled Supply Chain Redesign of Supply Chain systems to exploit all available «resources» in the network Customers Channel Partners Suppliers Internal Visibility Integration Cloud Manufacturing Partners Custom Apps IBP Response On-Premise: ERP, SCM, BW, GATP, Supply Planning, Strategic Procurement, Etc. Transportation Carriers 3PLs IT systems covering value chain planning and execution are being disrupted Online platforms are replacing traditional on premise application,and expanding to cover all major aspect of value chain management, from demand forecasting to transportation management, from sales management to people management Sales Company's Social Networks

29 Design for Supply Chain Fast to the market by measuring the alignment between product design and supply chains Telco Company Supply-ability card to measure the consistency between new product design and supply chain requirements Ordinability, Node Assembly and Test, Module Production and Test, Replenishment, Software Supply, Distribution

30 Supply Chain Finance for Risk mitigation Digital-enabled combination of Supply Chain and Financial Data/Information in order to assess and mitigate Supply Chain Risks Supplier default risk management: Fincantieri case study A combination of operational and financial data to timely assess supplier risk and avoid bankruptancy: 200 suppliers per year have a potential high risk Model oriented to blend financial data and internal vendor rating 3 steps: selection of risky suppliers, collection of vendor rating data, mitigation strategy

31 Blockchain to «track» the Supply Chain A new classes of technologies to address a very old problem with complex supply chains: the collection and availability of certified original data Tracking tuna with the blockchain «The project s aim was to guarantee the origin and to prevent slavery in the tuna supply chain in Indonesia. Blockchain technology, mobile and smart tags allowed to collect data and guarantee their integrity along a chain that involves about human resources and 8 companies at a low cost (data were collected from fisheries through their mobile phones and a 3G connection).»

32 Blockchain for Global Trade A new classes of technologies to address a second very old problem with complex supply chains: the management of international exchanges Global Logistics Blockchain platform to provide end-to-end supply chain visibility to securely and seamlessly exchange information about shipment events in real time. Smart contracts to reduce the time and cost for clearance and cargo movement also reducing errors and inaccuracies

33 What s the resulting «moment» of the forces? Digital Trends as Complexity Increase (exogenous forces) Digital Trends as Solution Enablers (endogenous forces) The result depends on: The intensity of the force = the combinatorial effect of new digital-based solutions The point of application of the force = the organizational scope

34 The new technological paradigms are changing the market scenarios influencing both consumers behaviours and business models Alessandro Perego Direttore Scientifico Osservatori Digital Innovation Ordinario di Logistica e Supply Chain Management School of Management Politecnico di Milano Direttore Dipartimento Ingegneria Gestionale, Politecnico di Milano Boost your business network Build your collaborative ecosystem May the 18 th 2018