Intelligent Supply Chains Værdikæder i netværk og plug n play supply chains Professor Charles Møller, Ph.D. Center for Industrial Production Aalborg University, Denmark
Supply Chain Management? Source: Lambert, 2008 "If you are in supply chain management today then complexity is a cancer that you have to fight, and process management is the weapon. Tom Blackstock, Vice President, Supply Chain Operations, Coca-Cola North America 2
Why do we need intelligent Supply Chains? 3
Two Supply Chain Paradigms Traditional Supply Chain Intelligent Supply Chain Cost Value Static Dynamic Reactive Proactive Flexibility Agility Planning Execution What is the optimal supply chain configuration? How do we use the existing configuration in the most effective way? 4
The Chief Supply Chain Officer Agenda (impact of challenge) Cost Containment (55%) Source: IBM, 2009 Rapid, constant change is rocking this traditional area of strength and outstripping supply chain executives ability to adapt. Supply Chain Visibility (70%) Flooded with more information than ever, supply chain executives still struggle to see and act on the right information. Risk Management (60%) CFOs are not the only senior executives urgently concerned about risk; risk management ranks remarkably high on the supply chain agenda as well. Customer intimacy/ increased demand (56%) Despite demand-driven mantras, companies are better connected to their suppliers than their customers. Globalization (43%) Contrary to initial rationale, globalization has proven to be more about revenue growth than cost savings. 5
Smarter Supply Chain of the Future? Source: Lambert, 2008 Volatile times demand pervasive visibility & flexibility The IBM Supply Chain Study, 2008 6
The Smarter Supply Chain of the Future Source: IBM, 2009 Instrumented Information that was previously created by people will increasingly be machine-generated flowing out of sensors, RFID tags, meters, actuators, GPS and more Inventory will count itself Containers will detect their contents Pallets will report in if they end up in the wrong place Interconnected The entire supply chain will be connected not just customers, suppliers and IT systems in general, but also parts, products and other smart objects used to monitor the supply chain Extensive connectivity will enable worldwide networks of supply chains to plan and make decisions together Intelligent These supply chain decisions will also be much smarter Advanced analytics and modeling will help decision makers evaluate alternatives against an incredibly complex and dynamic set of risks and constraints And smarter systems will even make some decisions automatically increasing responsiveness and limiting the need for human intervention 7
Examples of Smarter Cost Containment Source: IBM, 2009 Instrumented Sensor-based solutions to reduce inventory costs with increased visibility Production and distribution process detectors to monitor and control energy usage and waste Physical transportation, distribution and facility asset management, controlled and monitored with smart devices for efficiency and utilization Interconnected Agile, on demand network of suppliers, contract manufacturers, service providers and other (financial and regulatory) constituents Outsourcing non-differentiating functions to share risks across the global network Variable cost structures that fluctuate with market demand Shared decision making with partners at source (local, regional, global strategies) Integrated, networked asset utilization and management Intelligent Network and distribution strategy analysis and modeling with event simulations Scenario-based operational analysis Simulation models and analyzers to evaluate flexibility factors service levels, costs, time, quality with inventory synchronization Sustainability models to analyze and monitor usage impact (carbon, energy, water, waste) Integrated demand and supply management with advanced decision support 8
Examples of Smarter Visibility Source: IBM, 2009 Instrumented Shelf-level replenishment Event-driven monitors and alert detection based upon thresholds and tolerances Smart devices and sensors (RFID) to capture real-time visibility: forecasts/orders, schedules/commitments, pipeline inventory, shipment lifecycle status Sense-and-respond demand and supply signal notification Interconnected ERP to ERP to ERP integration Multi-partner collaborative platform for suppliers, customers and service providers, with data synthesis and decision support Integrated forecasting, orders and point-of-sale Dynamic supply-demand balancing with just-in-time and demand-driven replenishment Integrated performance management Intelligent Pipeline inventory forecasting and analytics Service-level analysis with inventory optimization Optimized buy recommendations Price-protection analysis Advanced decision-support analytics and optimization to automate and self-actuate supply chain transactions Predictive buy-sell decision support 9
Examples of Smarter Risk Management Source: IBM, 2009 Instrumented Monitors and sensors for product traceability from ingredients to final customer consumption Sensor solutions for monitoring product condition through the supply chain to help ensure product quality Weather intelligence and sensors for predictive analysis for supply planning, shipment routing and allocations Interconnected Resilient supply chain network design at strategic level Network integration with variable contingency plans and policies Integration of financial and operational analysis Compliance strategies and policies with suppliers, service providers, contract manufacturers Networked sustainability policies for entire product lifecycle from design through consumption to afterlife Intelligent Probability-based risk assessment and predictive analysis: likelihood, severity, ease of detection for key risk factors with mitigation policies and procedures Risk-based financial impact analysis: decision tree, sensitivity analysis Risk-adjusted inventory optimization Disaster response simulation models Bayesian supply chain risk analysis and mitigation models 10
Examples of Smarter Customer Interaction Source: IBM, 2009 Instrumented Sensor solutions to signal retail shelf requirements On-site services such as automated sensor-based checkout Product authentication and consumer loyalty program access with customer cell phones Embedded software and analytics for automated product defect and service alerts Interconnected Global versus regional versus local strategies and tactics Networked S&OP with optimized forecast, buy/sell decision support Sustainable, green considerations and co-branding: Product design and packaging, Cobranding with customer initiatives, Compliance programs Customer collaboration throughout all supply chain processes Intelligent Customer segmentation of product/service portfolio: profitability; geography/market; product/service mix Simulation models of customer behavior, buying patterns and market penetration applied to planning and operations volumes Optimized inventory pipeline planning and execution by customer segment Cost-to-serve models and analysis 11
Examples of Smarter Global Integration Source: IBM, 2009 Instrumented Sense-and-respond event management for end-to-end supply chain activities Sensors and actuators: manufacturing, logistics, and process control Real-time interconnection with sensors to detect product and shipment locations worldwide Sensor solutions connecting the expanding global trading partner infrastructure for increased supply chain visibility Interconnected Global centers of excellence to optimize capability and delivery Right-sourced global logistics network SOA-based integration of heterogeneous systems Collaboration tools embedded into performance management system End-to-end supply chain collaboration tools and methods Intelligent Integrated dashboards for KPIs and event alerts, driven by business rules Demand, supply and distribution network planning and execution Simulation models and scenario-based strategies for planning Optimization of inventory throughout all phases of pipeline activity Integration of risk management and mitigation approaches Integrated production planning and execution 12
Designing Intelligent Supply Chains Source: Adapted from Siurdyban & Møller, 2009 Development Perspective Structure Operational perspective Process Build Run Problems Transform Evaluate Grow Guidelines Innovation perspective Evolution Learning perspective Refinement 13
Værdikæder i netværk plug n play supply chain (1) Problemstilling/rationale Fremstilling foregår i dag i åbne globale værdikæder Det gælder også for danske fremstillingsvirksomheder, hvor specielt de større virksomheder organiserer deres fremstillingsaktiviteter i globale værdikæder Det giver ikke alene virksomhederne optimal adgang til nye markeder, men også til teknologi, forskning samt højtuddannet og kvalificeret arbejdskraft Dansk industri består imidlertid overvejende af små og mellemstore virksomheder, hvor en meget stor andel fungerer som fleksible underleverandørvirksomheder, der pga. størrelse og ressourcer primært fokuserer på nærmarkeder Problemet for mange af disse virksomheder er, at selv om de besidder en høj kompetence inden for hvert deres felt, så kan de ikke alene matche de store internationale kunders krav De har ikke adgang til et netværk af samarbejdspartnere, der komplementerer deres specialer og de har ikke kapitalstyrke eller opgaver nok til at kunne opretholde specialistkompetencer Der ligger derfor store muligheder for Danske underleverandører, hvis mulighederne for samarbejde i netværk forbedres 14
Værdikæder i netværk plug n play supply chain (2) Mulige forsknings og udviklingsopgaver Udvikle metoder og teorier for, hvordan man optimerer/opdeler og skaber øget værdi i komplekse værdikæder Integration mellem OEM s og mindre leverandørers produktionssystemer Udvikling af et fleksibelt IT system, der kan samle værdikæder i et netværk med ukendte partnere Udvikling af en virtuel markedsplads til hurtig udbygning af netværk Udvikling af metoder, der sikrer, at vi som minimum får den sammen produktivitet i netværk som i forhold til single location produktion Udvikling af metoder og teknologier der understøtter distribueret R&D Innovativ udvikling i netværk, eg. i sammen med kunden, leverandører og videncentre Integration af teknologileverandører i udvikling Udforskning af netværkssamarbejde og konceptet Intelligente forsyningskæder Centrale faktorer og egenskaber der karakteriserer netværk, som bringer dem op på et langsigtet vedvarende kompetitivt niveau Identifikation af hvilke teknologier, der kan blive danske spydspidser inden for design af nye produktionssystemer Udvikling af konceptuelle modeller for netværk og tilsvarende produktionssystemer 15
Key Ideas for researching the Intelligent Supply Chain Network-Centric Approach Real-time Enterprise Business Process Management 16 Enabling Technologies