A Framework For The Smarter Supply Chain

Transcription

1 IBM Industry Solutions A Framework For The Smarter Supply Chain IBM Smarter Business and Technology Series 2010 Jonathan Austin Industry Frameworks Leader for Industrial Sector ASEAN

2 Agenda Mid-market View from IBM CEO Study 2010 Smarter Supply Chain Frameworks for the Smarter Supply Chain Supply Chain Performance Management 2 2 Copyright IBM Corporation 2009

3 Today s complexity foreshadows an even more complex future for Midmarket CEOs who are challenged to close the gap Currently experiencing high/very high level of complexity 60% Expect high/very high level of complexity over the next 5 years 78% Feel prepared for expected complexity 54% 24 % Complexity gap* Required amount of change to respond to external factors 9% 25% 67% Not at all/to limited change some change large/very large change * Complexity gap = difference between expected complexity and the extent to which CEOs feel prepared to manage complexity IBM CEO Survey Copyright IBM Corporation 2009

4 Within a Complex Supply Chain Supply Chain Demand Chain Sub Contractor Broker Retail Customer Equipment Supplier Distribution Center Manufacturer Distributor or Wholesaler Consumer Materials Supplier Advertising Agency The ability to act smarter will optimize performance 4 Copyright IBM Corporation 2009 SAP 2008/Page 4

5 Problems that may limit performance Only 16% manufacturer s trade promotions turn a profit 6% up to 20% during promotions 12% out-of-stock Forecast accuracy 50-70% Customer order fulfillment 80% Average of 50 days of supply in inventory 70% to 90% of new product launches fail. More than 100,000 advertised brands exist in the industry Ten s of thousands new items will be introduced the vast majority will fail $1T in inventory across the entire value chain results in average customer fill rate of 70%. 5 Copyright IBM Corporation 2009

6 Forecasting & Inventory Management In general, the forecasting accuracy shows similar trends, with midsize manufacturers marginally better However, the small manufacturers have more FG stock, probably due to more uncertainty from demand side. 6 Copyright IBM Corporation 2009

7 Successful companies capitalize on complexity in three ways Creativity is #1 leadership quality Drive change in the organization to stay ahead of market and use a wide range of communication styles and tools Break with status quo of industry, enterprise and revenue models Use iterative strategies, make quick decisions and execute with speed Integrate globally, increase cost variability and exploit partnering to increase agility Getting closer to customers is the single most important theme Better understand customer needs through collaboration and info sharing IBM CEO Survey Copyright IBM Corporation 2009

8 Overall Business Drivers next months Midsize manufacturers are driven by Productivity/ efficiency, geographic expansion and capacity addition Small manufacturers are more cost conscious, and want to retain existing customers Top 3 drivers overall are cost, new business, and productivity improvement 8 Copyright IBM Corporation 2009

9 Global trend digital convergence, globalization... the world is changing and becoming more Instrumented Interconnected Intelligent The explosion of new information, when integrated, analyzed, and acted upon using new types of intelligence, enables solutions that help build a Smarter Planet 9 9 Copyright IBM Corporation 2009

10 What is smarter supply chain? Your answer to renewed manufacturing agenda! Interconnected Improve Quality Instrumented Insightful Visibility Cost Containment Risk Mitigation Improve Yield Globalization Intelligent Sense and Respond 10 Copyright IBM Corporation 2009

11 Key Operational Initiatives Quality improvement is the single most important operational initiative Other initiatives are fragmented, but reduction of delivery time, and manufacturing cost are the other 2 overall initiatives. In general, responsiveness and customer-centricity emerge as central themes 11 Copyright IBM Corporation 2009

12 1 Smarter Supply Chain: Powerfully Instrumented MEASURE Manufacturing Equipment is Instrumented and Automated Instrumented MONITOR Providing Live Broadcasts of Smarter Manufacturing Information SCADA DCS MES Historian SPC Databases STATUS EVENTS Insightful ACTIVITIES EXCEPTIONS We can measure everything. Visibility We can see everything. 12 Copyright IBM Corporation 2009

13 2 Smarter Supply Chain: Extensively Interconnected Synchronize the Pulse Interconnected Synchronize All Manufacturing Functions Create a Sense and Respond action from your manufacturing network to your customers A Single Point of View A holistic approach to pulse, constraints, and event triggers The manufacturing network tightly integrated 13 Copyright IBM Corporation 2009

14 3 Smarter Supply Chain: Faster and Intelligent SMARTER Manufacturing: The pulse is visible. Decision making is fast and intelligent. Status is known real-time. Intelligent Predictive and Adaptable Learn As You Execute Production Event-Triggered Manufacturing Network: Match the Pulse 14 Copyright IBM Corporation 2009

15 Future Outlook: The Smart Supply Chain will require more connectivity, collaboration, and integrated processes to improve visibility among network partners as demonstrated by leaders Sum: extensive & some extent Extensive 86% 7% 79% Planning with Suppliers Extent of implemented Integration Practices Leaders vs. Others 30% 16% 24% 19% 24% 9% Leaders: 72% 11% 19% Continuous Replenishment with customers Extensive 61% Largest gap 72% 53% Customer Inventory Planning & Deployment Some Implementation 63% 11% 1% 62% 16% Shared, realtime electronic data Intelligent Interconnected Instrumented Key Capabilities Decision-support based advanced analytics and optimization to automate and self-actuate supply chain transactions. Multi-partner collaborative platform Sense-and-respond demand & supply signal notification Smart devices & sensors (RFID) to capture real-time visibility: forecasts/orders schedules/commitments pipeline inventory shipment lifecycle status Others: Extensive Some Implementation * Leaders determined based on respondents ranking in AMR Research Supply Chain Top 25 for Copyright IBM Corporation 2009

16 Example: Airbus Strategic Vision & Plan for Business Value Creation RFID Accurate & Efficient Information Quick Wins Through Data Automation Visibility Information About Working, Not Working Long Term Wins Through Structural Process Transformation Measurability Business Process Where is It Working, Not Working? Improve the Way of Working Improving visibility is a pre-requisite to improve the Way of Working & to deliver business savings Business Savings EBIT, Cash, Cost Avoidance Carlo Nizam, Head of Value Chain Visibility & RFID, Airbus 16 Copyright IBM Corporation 2009

17 Key Takeaways for ASEAN small manufacturers Overall business drivers are cost, productivity and expansion There is a strong focus on quality, responsiveness and customer centricity Medium-sized manufacturers need help in their supply chain processes, inventory management, delivery performance as well as in managing their cash Smaller manufacturers need help in managing their financial performance, and they are not investing enough in IT 17 Copyright IBM Corporation 2009

18 SCOR SCC Suppliers & Manufacturers Design NPI Manufacturing Value Chain PLAN Source Make Deliver Customers & Channels Return - EOL!! "! #!! $! %&& "" ' " (! '""! )! " '""!" *! " "" ' PLM - PDIF, - + %" Framework!" ""# Infrastructure Platform 18 Copyright IBM Corporation 2009

19 IBM s Smarter Supply Chain Management Framework are organized around key functional areas Supply Chain Strategy Supply Chain Planning Supply Chain Performance Management Supply Chain Collaboration Asset Management Supply Chain Visibility Product Lifecycle Management / R&D Supply Chain Enterprise Applications 19 Copyright IBM Corporation 2009

20 Supply Chain Assessment Business Transformation Strategy Supply Chain Strategy Business Modeling & Governance Operations Improvement Green / Carbon Assessment Technology Assessment Mergers & Acquisitions Solutions IBM Global Business Services Consulting Offerings Supply Chain Planning Supply Chain Performance Mgmt Supply Chain Collaboration Business Events DW Solutions Business Integration Solutions, Commerce Server MDM Server Collaboration Asset Management Supply Chain Operations Product Lifecycle Management / R&D Maximo Business Events, BPM Solutions, Manufacturing Integration Solutions, Remote Server Traceability Server Product Development & eplm Solutions Telelogic Package Selection Version Upgrades Business Process Improvement, Design and Implementation Supply Chain Enterprise Applications Training and Learning Services Systems Harmonization IBM Global Business Services Consulting Offerings 20 Copyright IBM Corporation 2009

21 Technology Evolution the Age of Business Optimization Driver Singular Process Control & Visibility Process Efficiency Integrated Business Activities Across the Firm Internal & External Process Collaboration Insight applied to business operations Prescriptive Prescriptive analytics analytics Insight Insight visualization visualization Information Information Governance Governance Content Content Analytics Analytics Business Need 60 s 70 s 80 s 90 s 00 s 10 s Automate Processes Integrate Processes Optimize the Enterprise 2020 s Industry Response 21 Copyright IBM Corporation 2009

22 Business Analytics Answers 4 Key Questions.. Analytical Reporting Drill Real-Time Scenario Modeling What is What-if Advanced Analytics What might be OPEN DATA STRATEGY ERP 22 Supply Chain MES CRM 3PL WMS Inventory Copyright IBM Corporation 2009

23 Business Optimization - Electronics Asset Lifecycle Management Single View of Product Proactively manage growth of transactional data in Accounting, Sales and Logistics applications Improves service Gains control over its Master Data Management System (MDMS) when it deploys IBM InfoSphere MDM Server for PIM and realizes cost savings and increased productivity. levels and key business operations with IBM Optim Data Growth Solution Supply Chain Visibility Single View of Product Panasonic required a more effective way to create consistent and complete information about its products for customers, dealers and Websites. Used MDM, WAS, GBS Business Performance Tracks and analyzes production processes and issues more effectively with IBM Cognos BI software and improves on-time delivery for customers. 23 Copyright IBM Corporation 2009

24 Business Analytics Framework IBM Cognos 10 Go! Mobile Scorecards Reports & Analysis Dashboards Finance Supply Chain Metrics SCOR Metrics Blueprint Optimized S&OP Executive Review Integrated Financial Plan Operational Planning & Execution Demand Supply Predictive Models Demand Quantities Inventory Maintenance Customer Behavior After markets Analytic Applications Sales, Procurement, Finance, Workforce, etc Real Time Monitoring Operations Data ERP Inventory Supply Chain Logistics / 3PL MES Customer CRM Syndicated Data POS Data Trade Promotion Results Event Notification 24 Copyright IBM Corporation 2009

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28 Customer Examples VICOR Dashboards for all aspects of operations; 92% increase in Gross Margin Avaya Supply Chain visibility solutions; 356% ROI with payback in 4 months Daimler Trucks of NA Supplier performance & shortage focus; Shortages cut 50%; Rejects cut 30% Dole S&OP to simulate demand and supply in an SAP/i2 environment 28 Copyright IBM Corporation 2009

29 Ryobi Customer Warranty Analysis Customer Need: Customer returns led to poor financial performance and excessive financial reserves for warranty claims Approach: Analyze customer return data Root cause analysis Take corrective action in the production process to avoid future failure Cognos BI: Reports Analysis Query Solution Results $11 million savings attributed to Cognos through reduced warranty claims reserve 29 Copyright IBM Corporation 2009

30 IBM Value Creation for Customers Provides outsourced IT infrastructure services and business process services Global Technology Services Software Provides middleware that enables clients to integrate systems, processes and applications, as well as computer operating systems Provides professional services and application outsourcing services Global Business Services Value For Customers Global Financing Provides financing solutions that can be customized to address specific IT needs, from competitive rates to flexible payment plans and loans Provides advanced computing, storage and semiconductor technology and products Systems and Technology S&D and Research Our Sales and Research, Development and Intellectual Property organizations provide a wide spectrum of client support and additional value 30 Copyright IBM Corporation 2009