Exploration of market and technology trends that are prompting organizations to transform every aspect of supply chain management, including planning, order fulfillment, transportation, warehouse management, last-mile logistics, and supply chain visibility.

1. Supply Chain Transformation
From First to the Last Mile
Kris Gorrepati
Solution Management, Extended Supply Chain, SAP

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Agenda
Source: The Henry Ford
• Supply Chain Trends
• Elements of Supply Chain Transformation
• Roadmap for Supply Chain Transformation
• Q&A

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Supply Chain (A Century Ago)
16
Coal mines controlled by
Ford Motor Company
700,000
Acres of timberland
28
Hours for the iron ore to turn
into finished automobile
33
Countries in which Ford
operated. From Brazilian forests
to Northern Michigan mines
Source: The Henry Ford

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Supply Chain Today - By the Numbers
1 Billion
Possible Configurations
34.4 Million
Items ordered on Prime Day in 2015
630 Million
Estimated packages delivered by
UPS during holiday season in 2015
2 Weeks
From an idea to store shelf
500,000 Miles
Supply chain journey of an iPhone
2 Hours
Order-to-delivery time for
groceries

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Scope of Supply Chain
From First to the Last Mile
Retail
location
Distribution
Center
Factory Supplier Supplier’s
Supplier
Customers

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Trends Driving Supply Chains Today
Omni-channel E-commerce
Right level of
vertical and
horizontal
integration
Right combination
of global and local
supply chain

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Demands on Supply Chain
Agile
Responsive
Resilient
Personalize
d
Cost-effective

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The Demands on Supply Chain Can Make or Break an
Organization
E-commerce generates a lower operating profit
for us than four-wall brick-and-mortar.
When the consumer requires free delivery, free
return, wonderful packaging, plus there's a new
trend that people are buying multiple sizes of
things to try them out at home and then return
them, that all is a negative headwind for us.
- John Idol, CEO of Michael Kors
Only 19 percent of the top 250 retailers(and
only 16 percent of all respondents) say they
can fulfill omni-channel demand profitability
- The Omni-channel Fulfillment Imperative

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Elements of Supply Chain Transformation
Social networks
Connected
Retail
Last mile delivery
Warehouse
Automation
Autonomous
Driving
Supply Chain
CollaborationRobotics
Internet of Things
(IoT)
Internet
Search
Smart Products
Demand Sensing
Factory
Automation
Collaboration
Agile Planning
Scheduling and
optimization

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Demand Planning is Getting More Granular
Category, Product, Geography, Customer Segment
Demand Factors
• Simultaneous external demand
from multiple customers
• Seasonal, time-varying demand
• Intermittent demand
• Promotions, Outliers
• Over- and under- forecasting
• Consideration of recent process
changes
Location
Attribute(s)
Brand
Category
Channel
Region
Company

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More Sources of Data

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Demand Forecasts have Large Impacts on Deep Supply Chains

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Responsive and Intelligent Order Fulfillment
Agile
Responsive
Resilient
Personalize
d
Cost-effective

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Inventory Management
Real world is
Stochastic
Made of multi-stage networks
Dynamic
Integrated
Requires appropriate inventory
positioning and agility

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Warehouse Management and Operations
Warehouses are often under utilized
or overflowing
Source: Flexe
• Automation
• Robotics
• Internet of Things
• On-demand Warehousing
• Retail outlet as mini-warehouse

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Retail Locations in Omni-channel
• Buy online and pick up in
store
• Returns processing for
online purchases
• Shipment from store for
local deliveries
• Try before you buy
Source: Hointer

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Transportation Management
• Between 15-25% of the trucks on
US roads are empty
• Non-empty trailers - 36% under
utilization
• Shortage of drivers
Source: IPIC 2016
• Pooling
• Collaborative storage and
distribution
• On-demand logistics
integration
• Dynamic scheduling and
optimization

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Last Mile Delivery
• Same-day delivery
• On-demand logistics
integration
• Local commerce

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Supply Chain to Shop Floor Synchronization
Production Leveling, Sequencing, Customization
Courtesy Assembly Mag
• Heijunka, JIT
systems require
supply chain to be in
sync with factory
systems
• Increasing proportion
of custom orders

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Supply Chain Visibility
• Full to segmented supply
chain visibility
• Upstream and downstream
supply chain visibility
• Intelligently handle
unexpected events
Jabil Supply Chain Control Tower
Tesco’s tag reading robot

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Supply Chain Collaboration
• Supply chain collaboration
through the whole lifecycle
• Early information sharing
• Collaborative issue
resolution

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Supply Chain Management is Driving Digital Transformation
Many digital transformation
initiatives are related to supply
chain management
• Omni-channel
• Connected retail
• Real-time supply chain planning
• Data science
• Robotics
• Internet of Things (IoT)
• Mobile
• Autonomous driving
• ….

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How and Where to Get Started
Single Channel Multiple Channels Omni-channel
Unified inventory
Omni-channel order
management
Inventory optimization
Last mile logistics
360 customer view
Warehouse strategy
Connected retail / Buy
online pick up at store
Channel specific order
fulfillment
Inventory optimization
Logistics design and
optimization
Multi-channel CRM
Responsive order
fulfillment
Inventory
optimization
Logistics optimization

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Finally
Ask, what would do

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Contact Info
Kris Gorrepati
Krishna.gorrepati@sap.com

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