SUPPLY CHAIN CONTROL TOWERHOLY GRAIL OR HYPE?

NEW RULE: CONSUMER OWNS YOUR SUPPLY CHAIN…

Brand Owner DC

Retailer DCs

Contract Manufactur

er DC3PL

Omni-channel

Consumer

Retailer Stores

Contract Manufactur

er Plant

YESTERDAY’S SOLUTION PARADIGMS ARE INEFFECTIVE…

Lack of Trust across Network: Multiple Demand Signals

Silo / Enterprise Focus in Supply Response

Limited Segmentation / Cost To Serve

S&OP Plans disconnected from Execution

Stale Data, limited network wide visibility

Static S&OP, spreadsheet heavy, limited what-if

Too volatile & complex to fix with spreadsheets & planners

WHAT IT TAKES TO COMPETE EFFECTIVELY…

Maturity Path

Stage-1Functional

Stage-2Extended

Stage-3Integrated

Stage-4Demand Driven

Stage-5Value Network

Solution Focus Develop

Operational Plan

Demand & Supply

Matching

Profitability

Demand Sensing/ Demand Shaping

Orchestrated Network Value

Creation

* Gartner’s Demand Driven five stage reference model

Department

Enterprise Network

X g

ERP ERP

SCP

ERP

SCP

IBP

ERP

SCP

IBP

ERP

SCP

IBP

Control Tower

Demand Sensing

Demand Sensing

YOU NEED TO THINK HOLISTIC…NOT JUST CONTROL TOWER

Customer 360Demand Sensing Demand Shaping

Demand FlowcastingInventory & Supply

PlanningTrade Promotions, NPI

Financial Alignment

Order Sourcing Available To PromiseOrder Track & Trace

Performance Management

Visibility Monitoring

Collaboration NetworkControlTower

IntegratedBusinessPlanning

Distributed

OrderFulfillmen

t

DemandSignal

Management

NETWORKS COMPETING WITH NETWORKS…

Cloud Based Network Model

3PL

Contract Manufacture

r DC

Retailer DC

Retailer Stores

Contract Manufacture

r Plant

Brand Owner DC

Flowcasting: Single Demand Signal

Predictive: Sense & Shape Demand

No latency: Real-Time Network

Many-to-Many Collaboration

Financial Performance Driven

WHAT’S WRONG WITH CONTROL TOWER SOLUTIONS TODAY…

Enterprise Centric, not Network Centric

Focused on reporting current exceptions, not Predictive

Too Supply Chain Focused, not Financially driven

Do not enable context-rich collaboration

Not designed to be Digital Avatars of Planners

Overwhelm Planners, not Prescriptive & Automated

Visibility centric, Do not connect seamlessly with Execution

CHALLENGES AT A SEMICONDUCTOR COMPANY…

Lack of Collaboration internally & externally

Sales Forecast $$ based, no robust units based demand signal

Growing Inventory due to Demand/Supply Mismatches

Planning – Execution Gap: Out of Control Expedite Cost

Lack of tools to sense & shape demand

Extrapolate history approach to demand forecasting

Eroding Margin

REALITY AFTERWARDS…Business Processes Enabled Business Capabilities Enabled Business Benefits Achieved

Forecasting One source for unit and $$ forecast Forecast by Customer Segments &

Channels Forecast Accuracy improvement

Inventory Planning Inventory projection at detailed mix Inventory Segmentation

Proactive identification of Slow Moving Inventory

Inventory projection by mix

Supply Planning End-to-End Integrated Supply Planning Accurate inventory consumption Reduced shortages Faster response to demand changes

Constrained Supply Planning

Segmented manufacturing strategy Stable lead times Improved CRD attainment

Order Promising Realistic order commits Automated improvements of order lines -

daily

Improved inventory velocity Improved delivery lead times