Post on 07-Mar-2018
© 2012 IBM Corporation © 2012 IBM Corporation
Smarter Supply Chain – The Role of Advanced
Analytics in Optimizing Supply Chain and Managing
Complexity
Donnie Haye, Vice President
Smarter Supply Chain Analytics
IBM Integrated Supply Chain
© 2012 IBM Corporation © 2012 IBM Corporation
Agenda
Point of View: Supply chain complexity, big data, advanced
analytics
Key analytics solutions at IBM
Practitioner’s note: lessons learned from initial idea
through global implementation
Vision for the future
© 2012 IBM Corporation © 2012 IBM Corporation
Typical multi-enterprise supply chain – complexity at each tier
& compounded across tiers
A highly complex operational environment makes effective & timely supply chain planning & execution very difficult
Tier 0
Tier 1
Tier N..
The multi-enterprise SC challenge
Clients, channel partners
Suppliers
Business Partners End users
Owners,
stakeholders
Customers
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© 2012 IBM Corporation © 2012 IBM Corporation
Top challenges from recent research reveal that supply chain complexity is driving the need for visibility, analytics, collaboration
Visibility is both a challenge and a key enabler…
Supply chain visibility as challenge and enabler
4 Source: IBM Institute for Business Value (IBV)
© 2012 IBM Corporation © 2012 IBM Corporation
To address these challenges, Visionaries & Planners are investing to build strategic, smarter supply chain capabilities – with financial rewards
Value of smarter supply chains
3 year average ROIC
3 year average revenue growth
VISIONARIES
PLANNERS
OPERATORS
Source: IBM Institute for Business Value New Rules For A New Decade Study 2010. Analysis based
upon IBM study and on publicly available data from Thomson Financial. 5
© 2012 IBM Corporation © 2012 IBM Corporation
Big Data: complexity & proliferation of supply chain data both demand and facilitate a smarter approach
Velocity Volume Variety ---- ----
INCREASING
Intelligent buildings
Statistical Process Control
Tracking Inbound shipments
Warranty Claims
Purchase Orders
Late shipments
Invoices
Tracking Outbound Shipments
Hub Inventory
Customer Records
Real Time Data
Order Drops
End User sell through
Warranty Returns
Channel Pulls
Inventory status
Overnight Batch
Processing
Smarter supply chain analytics
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© 2012 IBM Corporation © 2012 IBM Corporation
What happened?
Get in touch with reality, a single source of the truth
- Standard reporting
- Ad hoc reporting
- Query/drill-down
- Dashboarding, visualization
How many, how often, where?
What will happen?
Understand the most likely future scenario, and its business implications
- Simulation
- Advanced forecasting models
- Predictive modeling
How are market or business trends likely to change? Can we develop a better forecast?
What should we do about it?
Collaborate for maximum business value, informed by advanced analytics
- Multi-factor optimization
- Trade-off analysis
- Automated, collaborative business process execution
- Role-based alerting
Given best information and predictive models, what actions should we employ to manage multiple constraints, variability, risk?
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Descriptive
Predictive
Prescriptive
Business intelligence & advanced analytics generates real value from big data
Advanced analytics
Align / Anticipate / Act
© 2012 IBM Corporation © 2012 IBM Corporation
Supply Chain Management analytics is at the core of IBM Integrated Supply Chain (ISC) strategy
Focus on supply chain analytics
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ISC Strategic
Priorities
© 2012 IBM Corporation © 2012 IBM Corporation
Supply Chain Management analytics is at the core of IBM Integrated Supply Chain (ISC) strategy
Driving the IBM transformation… cost to value…
Multinational Era Globally Integrated
Enterprise
Smarter Supply Chain
Focus on supply chain analytics
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ISC Strategic
Priorities
© 2012 IBM Corporation © 2012 IBM Corporation
We employ analytics on an evolving platform of Big Data and multi-enterprise supply chain visibility
Volume
Velocity
Variety
Descriptive
Predictive
Prescriptive
Business Analytics
Big Data Platform
IBM Buy Analysis Tool
Critical Parts Management Tool
Quality Early Warning System
IBM Supply Chain Examples
Smarter supply chain analytics
More than 25 Supply Chain Analytics and Visibility solutions are
deployed or under development in ISC 10
Supplier Risk Management
© 2012 IBM Corporation © 2012 IBM Corporation
IBM Buy Analysis Tool (iBAT) is a visibility and analytical platform to enable better channel management
Solution profile: iBAT
iBAT enabled System X recognized by the industry with multiple awards; Tech Data 2010 Inventory Optimization award, CRN Channel Champion award
The Solution
Channel collaboration solution
with advanced analytical modeling
of daily demand signals to supply
pipeline. Optimized
replenishment decisions under
price protection
Key Benefits
Price protection expense reduce
by 80%
Inventory reduced by 30%
Returns reduced by over 50%
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© 2012 IBM Corporation © 2012 IBM Corporation
Critical Parts Management Tool provides upstream multi-tier visibility with analytics & optimization
Solution profile: CPMT
Critical Parts Issues
Industry awards in 2012
Excellence in Supply Mgt award from Institute of Supply Mgt / MSU
ML100 Manufacturing Leadership award
The Solution
Advanced analytical tool provides
visibility, management &
optimization of critical parts
across all upstream tiers of supply
chain
Key Benefits
Comprehensive network visibility,
60K SKUs, 100+ suppliers
Resource savings of 10%+ of
costs associated with managing
shortages
Higher levels of Customer
Satisfaction
Allowed significant agility in
handling supply constraints in Asia
during 2011
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© 2012 IBM Corporation © 2012 IBM Corporation
The Quality Early Warning System (QEWS) identifies trends before traditional Statistical Process Control (SPC)
Solution profile: QEWS
Results from QEWS POC at external client
The Solution
Software system using proprietary
IBM technology to detect &
prioritize quality problems earlier
with fewer false alarms, coupled
with push alert functionality for IBM
& suppliers to proactively detect &
manage quality issues at any
stage of product lifecycle
Key Benefits
Cost savings – $50M (2015 Financial Roadmap period), approximately $10M per year in
hard warranty savings, with additional soft savings and benefits in other areas
Proactive quality mgt – identify and resolve issues before they become problems, weeks
or even months earlier than traditional SPC
Improved quality processes – improves quality process efficiency and effectiveness
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© 2012 IBM Corporation © 2012 IBM Corporation
Supplier total risk tool & process provides systematic approach to understand & mitigate supply chain supplier risk
Solution profile: Risk Management
Risk Mitigation
Planning
On-going Risk
Monitoring and
Control
Risk Assessment
Catalogue full supplier risk
exposure across multiple risk
categories
Perform probability-based risk
assessment
Implement automated tool
Develop risk mitigation
strategies with process for
executive approval
Establish control limits for each
risk element
Drive new business processes,
escalation pathways
Monitor risks against specified
threshold limits
Update proactive risk mitigation
strategies as risk exposure
evolves
Work within sourcing
community to handle crisis
situations
Supplier Total Risk Tool & Process
Industry Recognition
CSCMP finalist for Supply Chain Innovation award
Highest accolades from Business Insurance Risk Management 2012 Summit
The Solution
Provides comprehensive
risk assessment and
ongoing mitigation,
protecting against loss of
revenue and profits by
minimizing the likelihood
and severity of supply
chain disruption
Key Benefits
Uncovers multiple risks, assesses likelihood
and impact of each
Addresses risks with formal mitigation plans
Provides consistent risk management approach
across brands/commodities
Trends and patterns are revealed by systematic
risk analysis 14
© 2012 IBM Corporation
Design Compelling business benefits for each supply
chain participant (win/win/win)..
Reflect benefits in terms and conditions..
It is OK to start small and build towards major impact..
Iterative approach allows you to improve your capabilities along
the way and build progressively stronger stakeholder support..
Business Alignment Strategy
Operation Teams must be willing and able to change..
As critical as the math is, process leadership and execution
expertise is even more important..
Readiness To Change
Iterative Approach
Incentive Alignment
Smarter
Analytics
ALIGNED Collaboration
across business objectives
AGILE Highly responsive
to changing priorities
PREDICTIVE Able to anticipate, look
forward and set expectations
FOCUSED Clear understanding of what’s important
AWARE Alert, observant,
informed and perceptive
Critical success factors for successfully building value through advanced analytics
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Making change real, building business value
© 2012 IBM Corporation © 2012 IBM Corporation
Globally Integrated Enterprise
Multinational Era
Across the industry, the application of analytics is transforming supply chain from cost center to value center
Evolving supply chain
Point solutions to
cost & serviceability
issues
Enterprise-wide
effectiveness &
efficiency
End-to-end, multi-enterprise
visibility & optimization
Source of competitive
advantage
Client satisfaction and
bottom line performance
Smarter Supply Chain
Homegrown IT ERP Analytics
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Advanced Analytics…key to thriving in an ever more complex world
© 2012 IBM Corporation © 2012 IBM Corporation
Donnie Haye, Vice President
Smarter Supply Chain Analytics
IBM Integrated Supply Chain
dhaye@us.ibm.com
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Point of Contact