The Boundaryless Value-Chain
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Transcript of The Boundaryless Value-Chain
Peter Evans-Greenwood
Chief Technology Officer
The Boundaryless
Value-Chain
© 2009 Unico – All rights reserved
Yesterday: mass based
• More is better• Mountains of stuff
measured in days of supply
• Mass begets mass and slows everything down
• Metric: Mass
Today: just in time
• On-time is better• Inventory is reduced
to a minimum and kept moving
• Works great, except when it doesn't
• Metric: Velocity
Tomorrow: dynamic
• Agile is better• Virtual supply chains• Inventory dynamically
positioned• Distributed, adaptive
operations• Metric: Acceleration
A roadmap…
2
Yesterday: isolated applications
• Separate planning and execution systems• Logistics planning is actually production planning
• Users forced to deal with business exceptions• Identify root cause
• Resolve exception
• Manually update production plan
Planning
Execution
Planning
Execution
© 2009 Unico – All rights reserved 3
Yesterday: isolated applications
• Separate planning and execution systems• Logistics planning is actually production planning
• Users forced to deal with business exceptions• Identify root cause
• Resolve exception
• Manually update production plan
Planning
Execution
Planning
Execution
© 2009 Unico – All rights reserved 4
Iron Mountain• 1991: Persian Gulf• Out of 50,000 containers,
22,000 became “invisible”
The heritage of an application centric approach
• Focused on delivering major IT
assets• Historically, the only
economically sensible
approach to IT• We’ve been through a few
generations of technology• Main frame• Client-Server• Thin Client (Internet)
© 2009 Unico – All rights reserved
Data
Logic
UI
We were worried about solving the big problems, but not how these problems were connected
5
We’ve come a long way since then
© 2009 Unico – All rights reserved
U.S. software sales in billions of dollars
Source: INPUT
SOAP 1.0
WS-I foundedSAP WS
J2ME Web Services
ESB
Apache SOAPMS SOAPIBM Web Services
Apache Axis
JAX-RPCOracle WS
Sun WSWS (J2EE & .NET)
WS-* starts exploding
WS-*OASIS SOA Reference
ModelOASIS SOA Blueprints
SAP Netweaver Oracle Fusion
JAX-WSMS Indigo
BPEL BizTalk 2004Oracle BPEL
WBI-SFWS-Policy and WS-
Security
2004 200520032002200120001999
The Past Yesterday Now
A standards development timeline
6
Now we worry about end-to-end processes
• The challenge has moved• From delivering more
functionality…
• … to effectively leveraging
the applications we have
• Now we’re focused on• End-to-end processes
• Supporting users
© 2009 Unico – All rights reserved 7
The gaps between applications are becoming more important that the applications themselves
Application Silo
Application Silo
Application Silo
End-to-End Processes
End-to-End Processes
Today: joined-up logistics
• Explicitly connect planning to operations
• Provide users with a single consolidated view of logistics
functionality
• Simplify identifying and correcting business exceptions© 2009 Unico – All rights reserved 8
Planning
Execution
Planning
Execution
CompositeApplication
CompositeApplication
Today: joined-up logistics
• Explicitly connect planning to operations
• Provide users with a single consolidated view of logistics
functionality
• Simplify identifying and correcting business exceptions© 2009 Unico – All rights reserved 9
Planning
Execution
Planning
Execution
CompositeApplication
CompositeApplication
LEAN• Small, off site, warehouses
with hours or days of stock
© 2009 Unico – All rights reserved
Our focus is filling gaps & extending our reach
10
Mobility• Extending the reach of our
back office• Providing field workers with
joined-up IT support
Sensor Networks• Leverage technologies such
as RFID and smart appliances to instrument operations
Composite Applications &Mash-ups• Enable end-to-end processes
• Lower error rates• Increased throughput
• Lower user workload• No more swivel-chair integration• Provides the right data, at the
right time, presented to enable users to make better decisions
Partner Integration• Sales and operational data• Responsibility for end-to-end
business processes• Facilities and other assetsCustomer Integration• Self-service• More timely information• Reduce swivel-chair
integration
Process & Information Integration
Platform
Application Services
UI UI UI
Field Operations Back Office Partners & Customers
Platform
Application Services
UI UI UI
Platforms
Application Services
UI UI UI
But this is only a consolidation of functionality
• Enables end-to-end
processes• Lowers error rates• Increases throughput
• Lowers user workload• No more swivel-chair
integration• Provides the right data, at
the right time, presented
to enable users to make
better decisions
• Focused on removing
negative-value• Created by application
silos
• Does not deliver new
functionality
© 2009 Unico – All rights reserved
Benefits Limitations
11
… which is creating a boundaryless environment
© 2009 Unico – All rights reserved
The old definitions of inside and outside the business are beginning to make little sense
12
… which is creating a boundaryless environment
© 2009 Unico – All rights reserved
The old definitions of inside and outside the business are beginning to make little sense
13
• Handed most of their supply chain to suppliers
• Now considered the most efficient supply chain in the US
• Stepped around the barrier of supply chain completely
• Vendors directly responsible for stocking, store layout and pricing
• Provide vendors with a direct feed on sales
• Significantly reduced operating costs
• Greatly increased sales per SKU
Target Home Depot Amazon
• Unlocking their enterprise functionality and providing it as an online service
• Latest installment is Amazon Fulfillment
• Allows you to forward deploy stock into Amazon facilities
• Dispatch on demand
Our two biggest challenges
© 2009 Unico – All rights reserved
Data Quality
Information that is:• Incomplete• Inconsistent• Uncertain• Dead
Supporting Our Planners
• Stuck between silod solutions
and incomplete information• Faced with a rapidly
changing business
environment• Not enough time to make
good decisions
The emerging environment is only making this worse
14
Tomorrow: distributed, real-time planning
• Automate day-to-day exception management• Users move to a supervisory/process-improvement role
• Leverage benefits of technology to optimize the logistics management• Move from locally acceptable solutions…
• …to globally optimal solutions
© 2009 Unico – All rights reserved 15
Planning
Execution
Planning
Execution
CompositeApplication
CompositeApplication
AutomationOptimization
AutomationOptimization
Tomorrow: distributed, real-time planning
• Automate day-to-day exception management• Users move to a supervisory/process-improvement role
• Leverage benefits of technology to optimize the logistics management• Move from locally acceptable solutions…
• …to globally optimal solutions
© 2009 Unico – All rights reserved 16
Planning
Execution
Planning
Execution
CompositeApplication
CompositeApplication
AutomationOptimization
AutomationOptimization
Agile• Inventory
dynamically positioned
• Delivery“at the moment”
Three strategies that might help
© 2009 Unico – All rights reserved
Steal an idea from
Web 2.0 and
mashups• Stop thinking about
applications• Start thinking about
creating spaces to
support the decision
making process
Extend out data
models• Look beyond master
data• Build a model of the
data we‘d like to use
to make decisions• Leverage external
information sources• Actively integrate
data into the model
Better informationSupporting stakeholders Buying time
Create more space
and time for users• Capture and
automate the easy
80% of exceptions• Let the users focus
on the hard 20%
17
1. Supporting stakeholders
From siloed applications... ... to productive planning spaces
Leverage Web 2.0 & mashups to create a more productive environment
Case
Client CaseWorker
PartnerTeam
Case
ClientCaseWork
er
Partner Team
Integrating applications
and collaboration
1. Supporting stakeholders
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Markup a la Mojito
Tags for semantic search
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Click through to connected spaces
Shipment status
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Data
Data we have, or that we can get • Plans• Transactional data• Operational data• Public data• Data scrapped from
competitive sources• ...
Information
Trends we‘ve noticed• Business intelligence• Our partners‘
performance• Our customers
behaviour• Observations of how
our competitors operate
• ...
Knowledge
Making connections• Connecting a pick-up
to a passing truck• Connecting a news
report to a potential disruption
• Connecting our prices to signals from the market
• ...
2. Create better information
© 2009 Unico – All rights reserved 21
2. Create better information
SeatHandlebars Frame
Front Wheel Back Wheel
Drive Train
A bike consists of a frame, two wheels, handlebars, a seat, drive train, and each wheel has a tyre. We also offer three types of bike: mountain, racing and hybrid
Let’s steal an idea from flexible manufacturing
… and build a planning component model
© 2009 Unico – All rights reserved 22
2. Create better information
SeatHandlebars Frame
Front Wheel Back Wheel
Drive Train
A bike consists of a frame, two wheels, handlebars, a seat, drive train, and each wheel has a tyre. We also offer three types of bike: mountain, racing and hybrid
Let’s steal an idea from flexible manufacturing
… and build a planning component model
Business Rules• Recognising
situations• Deciding on
actions
Predictions• Material prices• Competitor
prices• Events• ...
Concepts• Drivers• Events• Plans• ...
Assumptions• Simplifying our
understanding
3. Buying time
Clerks
Workflow toolsScripting languages
Composite Solutions
Business Transactions
3rd party applicationsNetwork services
Service WrappedLegacy Applications
Agents
Human users
Agents &Business Webs
Planning
Execution
CompositeApplication
Role BasedAutomation
PlanningMashup
PlanningModel
Other DataSources
Automate the easy 80%, letting people focus on the hard 20%
3. Buying time
Clerks
Workflow toolsScripting languages
Composite Solutions
Business Transactions
3rd party applicationsNetwork services
Service WrappedLegacy Applications
Agents
Human users
Agents &Business Webs
Planning
Execution
CompositeApplication
Role BasedAutomation
PlanningMashup
PlanningModel
Other DataSources
• We need to support the richness of human
deliberation• non-linear• trial-and-error
• Conventional enterprise technologies are not
up to the challenge• Java, C# etc are too focused on technical
concerns• BPM & rules engines cannot easily
support the conflicting rules and business
exceptions• We need to pull in new ideas and concepts
• Adding a layer to our conventional
enterprise toolkit
Automate the easy 80%, letting people focus on the hard 20%
The future: dynamic business webs
Identify Sources Select Provider Deliver Materiel
Traditional • Static default source • Next unit up chain • Only from local units
Boundaryless • Search all providers• All units can supply and
consume
• Select “best” based on readiness
• Dynamic positioning within supply chain
• Different and larger transport mix required
4PLMarketplace
3PL
Monitoring& Auditing
3PL 3PL
3PL
3PL
Generate Demand
Identify Sources
Deliver Material
Select Provider
Where is this leading?
Enterprise Applications Logistics
Yesterday • Applications are silos• Users mediate between
applications
• Logistics managed by production planning
• Manual exception management• Massive inventory used as a hedge
against uncertainty• Months – weeks
Today • Joined-up systems• Users focused on the task
at hand
• Just-in-time delivery• Prediction and static optimization • Some support for exception
management• Weeks – days
Tomorrow • Online, real-time, planning• Users focused on tuning
and innovation
• Elimination of DCs & creation of the moving warehouse
• 4PLs and dynamic supply chain formation
• Days – now
Conclusions
Organisationalboundaries mean little
• Organisational boundaries
are being eroded to create
a boundaryless
environment• We now have:
• Visibility across the
value-chain• Influence across the
value-chain• Less responsibility
• Today, our biggest asset—
our people—is holding us
back
Knowledge is keyif we want to move on
• Focus on creating the right
environment for our users• Tacit knowledge• Collaboration
• Extend our data models
beyond traditional
transactional data to
include other planning
drivers, business rules and
assumptions• Capture the easy 80% of
decisions, allowing our
stakeholders to focus on
the hard 20%
The end game isfulfillment network
• Elimination of DCs• Creation of moving
warehouse• Dynamic, virtual supply
chains• Moving our stakeholders
• from operational roles...• ... to process
improvement and
optimisation roles
© 2009 Unico – All rights reserved