Digitization of the supply chain a common responsibility

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1 Digitization of the supply chain a common responsibility Matthias Braun Head of network planning and location projects, Volkswagen Group Logistics,

2 Logistics in the Volkswagen Group has to handle high complexity within the supply network. >10 million vehicles are expected to be delivered in Suppliers Component production plants Vehicle production plants Sales markets GER FRA GB RUS Transportation network material Capacity network Transportation network vehicles IND USA MEX BRA CHN JAP 2

3 Digitization of the supply chain is a common responsibility of all process partners in the logistical supply networks. Digitizing Simply said challenging implementation. 1 Trying out 2 Initial findings from linking of supply chains 3 the Implementing Digitization projects logistics in the Group. of Volkswagen 3

4 When you hear digitization: What is your first thought? Smart data Data Automatization Intelligent systems Digitization Artificial intelligence Internet of things Interlinking Industry 4.0 Networks Smart sensors Cloud Internet IT security Realtime data Big data Smart factory 4

5 The Volkswagen Group Logistics defined two characteristics, which separate digitization projects from other projects. Digitization projects transfer manual into IT-supported processes. enable additional benefits through the use of digital technologies. 5

6 The inflationary use of the term Digitization hides, that the profitable use of new technologies is more difficult than believed. Data quality IT architecture Data standards Business models Data collection Data processing Data usage Sensors Data law AI methods Data value 6

7 Digitization of the supply chain is a common responsibility of all process partners in the logistical supply networks. Digitizing Simply said challenging implementation. 1 Trying out 2 Initial findings from linking of supply chains 3 the Implementing Digitization projects logistics in the Group. of Volkswagen 7

8 The public supported research project Visual Logistics Management (VILOMA) aimed already in 2013 at challenging developments in logistics. 1 2 Increasing flood of information overstrains Intuitive visualizations not present 3 Cross-company data base is missing Transport Ortsbestimmung Auslastung Fertigungsfortschritt Wareneingang Bestände Warenausgang Steuerung PPS ERP BDE Source: Lüddecke (2014) 8

9 5 0 VILOMA pursued three objectives to support the workflows of operational logisticians by linking available data Visualizing the information overload for target groups Predicting future system states Developing a real-time, crosscompany IT platform Range Target group Operational logistician for material and container supply. Premise Do not create new data, but link and use locally available data. 9

10 The developed prototype as well as the associated concepts support all the involved SC partners in critical supply situations. Monitoring Check ranges at (JIS) suppliers. Analyzing Recognize supply chains and stock changes. Track transports and status points. Decision making Decide on allocations of short-term supply. 10

11 The project partners collected various insights into the linkage of supply chains from the use of the prototype. Benefits for all partners Responsibility Common data base Recommendation for the standardization of data formats for wider distribution IT Joint decision-making basis for all SC partners Logistics Visual assistance of decision-making processes Continuously intuitive interface Interface 11

12 Volkswagen is participating in the definition of several VDA standards in order to promote cross-company communication in the process chain. VDA 4945 VDA 4933 VDA 4943 VDA 4933 VDA 4945 VDA 4947 Empties Order Shipping Cross Dock Cross Dock Receiving Customer Receiving Cross Dock Cross Dock Shipping Call-Off Material Supplier Open VDA 4945 VDA 4933 VDA 4987 VDA 4933 VDA 4921 VDA 4984 In implementation In preparation 4945 VDA 12

13 Digitization of the supply chain is a common responsibility of all process partners in the logistical supply networks. Digitizing Simply said challenging implementation. 1 Trying out 2 Initial findings from linking of supply chains 3 the Implementing Digitization projects logistics in the Group. of Volkswagen 13

14 DISCOVERY as a data slice supports the transparency of all transport concepts in the inbound logistics of the Volkswagen Group. Carrier + No manual acquisition is required + Electronic transport registration (web portal / EDI) eliminates media breaks Supplier DISCOVERY Digital Supply Chain Communication Group plant + Communication effort reduced + Decision-making process established + Prefilled transport request increases data quality + Pick-up confirmation improves scheduling + Transport stocks are transparent by reference number + Transport tracking along the event chain 14

15 DISCOVERY will provide high-quality information for analysis, optimization and control of downstream processes. Scheduling processes Carrier Time window control Environmental accounting Supplier Group plant Bottleneck control Risk map DISCOVERY Digital Supply Chain Communication Complaint processing of transport Transport process process billing 15

16 The exchange of already available company-internal data has great potential for efficient management of the supply network. Cooperate in partnership Openly cooperate and link value creation stages Readiness to increase data exchange Enable a company-wide data exchange Reduce effort for data integration Standardize the company-wide data exchange Use the potential of digitalization in the logistics Benefit the available information by exchange 16