Driving Innovation, Sustainability

and Performance Through Collaborative Value Networks

Andy Chatha

President

ARC Advisory Group

AChatha@ARCweb.com

2© ARC Advisory Group

ARC World Industry Forum Programs

1. Relentless Pursuit of Process Safety, Energy Optimization, and Operational Excellence

2. Anti-Counterfeiting and Brand Protection Solutions

3. Sustainability and Production Management Solutions

4. Improve Performance by Integrating Design and Production

5. Project Performance Management 2.0: Managing Risk, Interoperability, and Collaboration

6. Asset Performance Management 2.0: Optimizing Operations and Maintenance

7. Enterprise Mobility Solutions

8. Smart Energy Management Solutions

9. Beyond the Perfect Order Metric

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Today’s Business Drivers

Uncertainty

Security

Scarce Resources

Need to Go Green

Global Competition

Changing Workforce

Increasing Regulations

Emerging Smart Grid

Easy IT Solutions

Today’s business drivers demand agility

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Easy IT Solutions are Proliferating

Search

Social Networks

Smart Phones

GPS/Location-based services

Connected Devices/Internet of Things

BI or Business Analytics

Web Apps

Virtual PCs

Video

eBook

Cloud computing hides complexity from the user

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Two Quotes From P&G CEO Bob McDonald

On Digitizing P&G“With digitization, our goal is to standardize, automate and integrate systems and data so we can create a real-time operating and decision-making environment. We want P&G to be the most technology-enabled company in the world.”

On Real-time Data“We are targeting a 20-25% reduction in some spending areas and we are looking for a sevenfold increase in real-time data.”

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New Solutions Enable New Business Models

Greater consumer connectivity, greater knowledge & bargaining

power, mobility, collaborative buying, etc.

Crowdsourcing, co-production, rapid

innovation, customization, 3rd party

intermediaries

Complexity increases in every network and every dimension

Virtualization, PLM-MES integration, etc

Outsourcing, collaboration, etc

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ARC CMM Model Emphasizes the Plant as a Node in a Value Network

External

Business

Customers

Production

Automation

Suppliers

CPMLogistics

PLM/D

CRMSRM

PLM/S

ERP

Internal

Value Chain Dynamics DriveManufacturing Performance

ARC CMMCollaborative

Manufacturing Management

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Enterprise Value Network

Value is Created through the

DESIGN-MAKE-DELIVERNetwork

Production Network

Logistics

Distribution Purchasing

Service

Sales, Retail

Customers

Supplier Network

Engineering

Construction

Planning

Today manufacturers operate within one or more networks of companies that work together to provide goods and services to end consumers

Design

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Design

Collaborative Value Network (CVN)Focuses on Activities Throughout the Value Network

Production Network

Logistics

DistributionPurchasing

Service

Sales, Retail Customers

Supplier Network

Engineering

Construction

Plant & Equipment

Product & Plant

In order to compete effectively, better IT

tools are being utilized throughout the value network to speed and

optimize innovation, production, and

delivery of goods and services

Today manufacturers operate within one or more networks of companies that work together to provide goods and services to end consumers

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Enterprise CVN Demands Common Standards & Processes

Complementary Data Models

Compatible Technology

Consistent Processes

Shared GoalsGoals

People & Processes

Technology

Information

Goals

People & Processes

Technology

Information

Department XCompany X

Department YCompany Y

Common Standards & Processes are Needed at All Levels!

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CVN Complements CMM Helpful to Visualize Lifecycle and Value Network Issues

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• Operating Excellence

• Enterprise Visibility & Control

• Quality, Flexibility

• Efficiency & Cost Control

• Asset Performance

• Energy, Resource, Mgt

• Risk Mgt & Safety

Execution

• DynamicValue Creation

• Collaboration

• Business Innovation

• Product Innovation

• Mfg Process Innovation

• Marketing

Innovation

• Governance & Compliance

• REACH

• Emissions Mgt

• Carbon Tracking

• 21CFR part 11

• MTSA

• etc

Compliance

Drive Performance Three Business Imperatives for a Changing Marketplace

Transformative Innovation is Requiredto Achieve Highest Enterprise Performance

Optimize Performance

Extend & Transform Current Business

Support Corporate Citizenship

Be Proactive Be Responsible Be Effective

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Thank You.For more information, contact the author at xxx@arcweb.com or visit our web pages at

www.arcweb.com

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Acronyms Used in This Presentation

AIM Asset Information Management

ALM Asset Lifecycle Management

CMM Collaborative Management Model

CPAS Collaborative Process Automation Systems

CVN Collaborative Value Network

DCS Distributed Control Systems

ERP Enterprise Resource Planning

MES Manufacturing Execution System

OpX Operational Excellence

KPI Key Performance Indicators

PLM Product Lifecycle Management

SCM Supply Chain Management

SOA Services Oriented Architecture

RPM Real-time Performance Management

A complete list is available on ARC’s website: ARCweb.com