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Supply Chain Transformation on the Cloud |Accenture

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Supply Chain Transformation on the Cloud |Accenture

  1. 1. Supply Chain Transformation on the Cloud: What Executives Need to Know Copyright © 2021 Accenture. All rights reserved.
  2. 2. The cloud imperative in life sciences | 2 Supply Chain Transformation on the Cloud: What Executives Need to Know | Until recently, most people never gave much thought to the supply chain, and many only vaguely knew what “supply chain” meant. Then COVID-19 hit, and consumers began seeing product shortages and shipping delays as supply chain disruptions unfolded across the world. Suddenly, everyone was aware of what supply chains are and how vital they are to our daily lives. In the months after the beginning of the pandemic, all eyes, indeed, have been on the supply chain. And supply chain leaders’ jobs just got exponentially more difficult. Pre-pandemic, leaders always faced, at various times, fluctuating demand, the need for resilience, pressure to manage costs and calls for greater responsibility for the environment. Now, they have to deal with all four of these—at the same time. Supply chain leaders now face a four-pronged challenge Fluctuating demand Need for resilience Cost management pressures Calls for environmental responsibility Copyright © 2021 Accenture. All rights reserved.
  3. 3. 3 Supply Chain Transformation on the Cloud: What Executives Need to Know | To be truly in the cloud, the supply chain should be fully platform enabled, with the platform serving as the “glue” that seamlessly integrates all the important supply chain SaaS solutions together, across the end-to-end supply chain. This helps to reduce cost and complexity while providing agility and real-time access to integrated data for extreme visibility across a company’s operations and supply chain partners. The platform also enables companies to then apply a wide range of other leading tools and concepts to make the supply chain run even more effectively and flexibly—such as artificial intelligence that can automate various supply chain activities, digital twins of their operations that can model the impacts of various scenarios, and “digital decoupling,” which enables companies to integrate a new application quickly and easily without having to change their entire IT system every time. The cloud could even serve as an industrywide supply chain platform that all companies in that sector could use. But in the past year, leaders have had their eyes opened to this information latency challenge. They now see that it’s arguably the single most important thing they need to address to build the flexibility and resilience to withstand future disruptions of any magnitude. The cloud can help supply chain leaders address this four-pronged challenge. It provides technologies that allow companies to process huge amounts of data—from virtually unlimited sources across the entire supply chain—at speeds and volumes never before possible. It enables companies to deeply analyze that data to generate critical business insights that can vastly help improve decision making. And it allows companies to reconfigure how they work to gain the agility to deal with the consequences of whatever the data says. The cloud provides vast amounts of computing power, with a simple, flexible, and affordable data and digital architecture that opens up myriad possibilities for the supply chain—and enables leaders to manage service levels and cost, build in resilience, and ensure responsible operations. Importantly, the cloud is more than just computing infrastructure. Some companies may have moved some applications from their on-premises data center infrastructure to the cloud, or even have begun using software-as-a- service (SaaS) solutions such as Coupa, Blue Yonder, SAP, Oracle, OMP or Kinaxis (which offer tremendous potential to improve supply chain performance). But while that’s important, it’s still not being truly in the cloud. Reference: Accenture, CxO Pulse Survey: Key Trends and Insights on Recovery and Growth, August 2020 Answering the call with the cloud In fact, Accenture research has found that only 20% of supply chain application workloads are in the cloud today. Copyright © 2021 Accenture. All rights reserved.
  4. 4. 4 Supply Chain Transformation on the Cloud: What Executives Need to Know | By fully embracing the cloud, supply chain executives will be able to influence all dimensions of the supply chain—engineering (product), planning, procurement, manufacturing, fulfillment and service management—to create a supply chain that is: • Interconnected across the ecosystem • Intelligent through digitization, analytics, and automation for traceability, agility and resiliency • Innovative to replace a one-size-fits-all strategy with a tailored supply chain strategy Attaining these goals may require a much more ambitious push to the cloud across the supply chain. All supply chain functions will have to embrace the cloud to tackle short-term and long- term challenges, including developing remote access to a wealth of data, cross-collaborating and collecting data in real time to quickly and appropriately improve customer experiences, and reacting to unforeseen disruptions. Let’s take a look at these dimensions. We highlight the current state of cloud adoption across the main supply chain functions, the potential for future adoption in each, and some of the biggest opportunities the cloud offers. Where’s the opportunity today and tomorrow for the supply chain? Copyright © 2021 Accenture. All rights reserved.
  5. 5. 5 Supply Chain Transformation on the Cloud: What Executives Need to Know | Engineering State of cloud adoption: Engineering • Access product data anywhere, at any time and establish data continuity to foster remote working and greater visibility among internal groups, suppliers and service providers • Use should-cost modeling to balance product features with new product introduction costs • Deploy high-performance computing to deal with complex products and service portfolios resulting in low/static revenue growth and delayed go-to market • Conduct virtual prototyping to offer “first time right” products and services and enhance productivity of engineers, testers, and verification teams • Improve product performance to enhance customer experience with delightful products and services • Predict product service needs to be able to respond to rapid changes in demand, expectations, and capacity • Collaborate globally to respond fast to dramatic shifts in consumer preferences and demand, as well as orchestrate and optimize engineering processes • Enable innovation through larger ecosystems (new technologies and capabilities). Organizations can easily access capabilities that would normally be out of their reach. • Offer product-as-a-service • Execute product testing virtually • Create holistic customer experiences beyond base products • Use crowdsourcing design in prototyping • Use cloud-based digital twins to conduct virtual competitive product teardowns • Enable cloud-powered product engineering, automating the deployment and testing of new systems at a much higher volume and rate to amplify the power of engineers so that companies can roll out innovative technologies to more users much more quickly • Integrate data, analytics, and computing to make it easier to build digital thread and digital twin infrastructure, which enables a company to streamline and run simulations at scale across different engineering departments, even with manufacturing • Connect engineering with the business, providing a more reliable conduit between engineering systems and business back-office functions to power design-to-market and bill-of-materials procurement optimization functions OPPORTUNITIES SAMPLE USE CASES • Current cloud adoption level: LOW • Future cloud adoption level: HIGH Copyright © 2021 Accenture. All rights reserved.
  6. 6. 6 Supply Chain Transformation on the Cloud: What Executives Need to Know | Planning • Gain end-to-end real-time visibility to get accurate status of material location, customer orders’ progress and external factors (e.g., regulatory information) • Be able to sense and react to mitigate and manage shifts in customer demand and supply / network disruptions • Conduct finance, commercial and supply chain concurrent simulations including external factors to proactively or quickly respond to unplanned risks • Deploy AI to drive intelligent demand planning that combines segmentation, best- fit selection and forecast generation to improve insights into customer behavior and reduce cost-to-serve • Deploy cognitive forecasting using advanced and self-learning machines, powered by AI, which make decisions 24/7 without human intervention, if desired • Evaluate resilience by quickly running many and complex simulations and scenarios to determine areas that are at biggest risk of disruption • Implement a control tower that combines complete visibility across the network and ecosystem of partners with an intelligent brain to orchestrate operations and make intelligent decisions OPPORTUNITIES SAMPLE USE CASES • Current cloud adoption level: MEDIUM • Future cloud adoption level: HIGH State of cloud adoption: Planning Copyright © 2021 Accenture. All rights reserved.
  7. 7. 7 Supply Chain Transformation on the Cloud: What Executives Need to Know | Procurement • Gain deep visibility into spend to get a full picture of “who spends how much and on what” in order to pinpoint opportunities to rationalize specifications, reduce consumption through policies or negotiate or reduce pricing through sourcing • Collect external insights and intelligence to inform should-cost and clean sheet activities as well as benchmarks • Streamline and automate procurement source-to-pay to reduce transactional/ operational costs, improve compliance and streamline buying for internal customers • Use blockchain to create smart contracts to monitor pricing and terms compliance and identify risks • Manage suppliers more effectively to minimize supply risk and boost supplier collaboration and innovation • Shape the platform to share the problems suppliers can help solve, and to assess value propositions coming back to the company • Steer the ecosystem by enabling access to networks and third parties from outside the company • Facilitate the use of applications to automate traditional procurement deliverables (i.e., “procurement in a box”) and accelerate procurement transformation by “commoditizing” what’s currently in use • Enable guided buying that makes compliance “accidental” by directing purchases through suppliers while adhering to policies and processes • Provide greater visibility into spend, sustainability and supplier performance and risk, allowing procurement to identify opportunities to drive greater enterprise value—for example, by using analytics to identify and claim quality defects from suppliers • Enhance digital enablers to support innovation scouting and ecosystem activities (for example, open source and crowd sourcing) OPPORTUNITIES SAMPLE USE CASES • Current cloud adoption level: HIGH • Future cloud adoption level: HIGH State of cloud adoption: Procurement Copyright © 2021 Accenture. All rights reserved.
  8. 8. 8 Supply Chain Transformation on the Cloud: What Executives Need to Know | Manufacturing • Get new products to market faster and at the right margins through greater simulation between R&D and supply chain • Move from a reactive, fire-fighting model to more predictive and prescriptive operations and maintenance and improve overall production stability • Automate product quality inspection to minimize product waste and rework and enhance customer loyalty through right first time • Connect industrial workers to work execution activities and the right data at the right time while improving productivity and safety • Leverage robotics as part of the workforce to increase safety, sustainability, and production quality • Deliver on the promise of a more-sustainable and carbon-neutral agenda with energy optimization techniques • Reduce infrastructure, production and engineering costs through a more-effective total cost of operations technology • Wearables and voice recognition to help workers capture asset inspection and environmental, health, and safety (EH&S) observation data (for inspection data capture) • High-compute image processing for physical product quality control • Advanced machine learning for optimizing production and assets (above and beyond today’s advanced process control systems) to improve yield, quality, material waste, energy usage and asset reliability • Greater compute power to run optimization and simulate operations with real- time digital twins • Geoprocessing for connecting workers with the right assets and optimizing the workforce on site • Robotics to augment workers on production and inspections in high-hazard and high-risk zones OPPORTUNITIES SAMPLE USE CASES • Current cloud adoption level: LOW • Future cloud adoption level: MEDIUM State of cloud adoption: Manufacturing Copyright © 2021 Accenture. All rights reserved.
  9. 9. 9 Supply Chain Transformation on the Cloud: What Executives Need to Know | Fulfillment • Integrate planning and execution to reduce order cycle time and increase flexibility and agility with order delivery options • Remove boundaries across channels to give customers omni-channel access to products and services • Shift to a digital network to reduce dependence on owned assets and reduce cost-to-serve • Benefit from “planicution,” in which automatic fulfillment workflows are triggered when forecasts or plans are updated, without human intervention • Offer true omni-channel fulfillment—buy and ship anytime, anywhere, with dynamic delivery options • Go direct to consumer, adding B2C capabilities to existing B2B ones OPPORTUNITIES SAMPLE USE CASES • Current cloud adoption level: MEDIUM • Future cloud adoption level: HIGH State of cloud adoption: Fulfillment Copyright © 2021 Accenture. All rights reserved.
  10. 10. 10 Supply Chain Transformation on the Cloud: What Executives Need to Know | Service management • Increase the density and volume of IoT data collection and edge processing (cloud+5G) • Enable digital twin-driven simulation and analysis of the behavior of specific assets or products • Increase the breadth and engagement of customer service channels at a lower cost (e.g., AR/VR, digital human, and rich media) • Increase the efficiency of developing and delivering software-driven capability upgrades of hardware • Make real-time decisions to support asset availability in support of performance-based service contracts • Decrease time to resolution for field service workers by delivering rich technical information to the point of service, supplemented with over-the-shoulder coaching • Improve asset security, performance and reliability through software delivery • Improve the profitability of service contracts through deeper insights into the drivers of operating and maintenance costs OPPORTUNITIES SAMPLE USE CASES • Current cloud adoption level: LOW • Future cloud adoption level: HIGH State of cloud adoption: Service management Copyright © 2021 Accenture. All rights reserved.
  11. 11. 11 Supply Chain Transformation on the Cloud: What Executives Need to Know | Creating a cloud-based supply chain is an ambitious effort and, as such, requires a structured, disciplined approach. This approach, of course, will be different for every company—especially given that all companies won’t necessarily be starting from the same point. As illustrated on the next page in figure “Moving the supply chain to the cloud: Where to start and how to proceed”, supply chain leaders need to understand where their organization currently stands on the cloud maturity spectrum and what they need to do to advance. How to move forward Copyright © 2021 Accenture. All rights reserved.
  12. 12. 12 Supply Chain Transformation on the Cloud: What Executives Need to Know | Moving the supply chain to the cloud: Where you are and how to proceed The company has taken advantage of infrastructure- as-a-service (IaaS) by selectively moving some supply chain workloads to the cloud, but without transforming them. While the moves have helped reduce IT-related costs and enhance IT infrastructure agility, the workloads themselves have not been materially improved and key supply chain data remains trapped in individual applications. The company has begun to transform its on-premises packaged software by adopting cloud-based SaaS solutions solutions (e.g., Coupa and Blue Yonder). Doing so has helped the company optimize certain functional processes and create greater visibility within individual functions. But sharing data outside of these functionally siloed solutions remains difficult. The company has adopted platform-as-a-service (PaaS) as the technical backbone that integrates all of the functional SaaS solutions as well as key on- premises applications and even third parties. This is enabling the company to optimize the end-to-end supply chain, create innovative new capabilities, and tightly connect with the extended enterprise of suppliers and the broader ecosystem. Think holistically about what you want to achieve with your supply chain, define the questions that if answered will create end-to-end value for the supply chain and identify the data required to answer them. Transform supply chain functions via cloud-native applications and bring together relevant data, either in one of the applications or in a cloud-based analytics platform, to generate cross-functional insights. Industrialize the process of generating supply chain insights in an ongoing, repeatable way while driving automation down to the process execution level to reach greater heights of efficiency, speed and agility. STAGE 1: BASIC MODEL WHERE YOU ARE WHAT TO DO STAGE 2: FUNCTIONAL MODEL STAGE 3: ECOSYSTEM MODEL Copyright © 2021 Accenture. All rights reserved.
  13. 13. 13 Supply Chain Transformation on the Cloud: What Executives Need to Know | Two important items to note about this journey: A company may find that parts of its supply chain are at different points on the maturity spectrum. For example, as mentioned in the previous section, cloud usage in procurement is far more mature than in service management. But that’s not a problem, as long as a company has agreed on the overall vision for how the cloud will ultimately tie together all supply chain functions. If that’s in place, there’s no reason to hold up progress in one function while another “catches up”—as long as they’re all working toward the same goal and vision. Although companies (and even supply chain functions) may be at different points on the maturity spectrum, no one is ever truly “done” with the cloud journey. Business needs continue to change, and the questions companies need to address—and the data required to answer them—will evolve accordingly. The good news is, companies now have a powerful platform that enables them to ask and answer vital questions very quickly and cost effectively and translate those insights into specific actions that improve supply chain performance across the board. Our world today is truly different from what it was only 12 months ago, and all companies need to figure out how they respond to and thrive in this new reality. In most companies, their success will largely hinge on their supply chain and its ability to concurrently handle fluctuating demand, the need for resilience, the pressure to manage costs, and calls for greater responsibility for society and the environment. It’s a tall order, but the cloud can help—and supply chain leaders should consider how they can start taking greater advantage of it. 01 02 Copyright © 2021 Accenture. All rights reserved.
  14. 14. Francois X. Bourbigot Managing Director, Strategy & Consulting, Supply Chain & Operations Authors Kris Timmermans Senior Managing Director, Strategy & Consulting, Supply Chain & Operations Global Lead David Simchi-Levi Professor of Engineering Systems at MIT and Head of the MIT Data Science Lab Kristine Renker Managing Director, Strategy & Consulting, Supply Chain & Operations, Global 14 Supply Chain Transformation on the Cloud: What Executives Need to Know | Jordi Paris Managing Director, Strategy & Consulting, Supply Chain & Operations, Technology Strategy & Advisory Contributors Craig Gottlieb Managing Director, Strategy & Consulting, Aerospace & Defense, North America Olivier Proulx Senior Consultant, Strategy & Consulting, Supply Chain & Operations Steve Puricelli Managing Director, Strategy & Consulting, Supply Chain & Operations, Industrial & Automotive, North America Tracey Countryman Managing Director, Strategy & Consulting, Industry X, Digital Manufacturing & Operations, Global Manufacturing Lead Copyright © 2021 Accenture. All rights reserved.
  15. 15. As you begin to reimagine your business, taking a closer look at the specific challenges you face within your supply chain and operations is an important first step. To help you on your way, we’ve provided some additional reading material on a variety of topics. https://www.accenture.com/us-en/insights/industry-x/ cloud-enabled-manufacturing https://www.accenture.com/us-en/insights/consulting/ customer-centric-supply-chains https://www.accenture.com/us-en/insights/consulting/ digitalization-drives-smarter-supply-chain https://www.accenture.com/us-en/services/supply- chain-operations/resilient-supply-chain?c=acn_glb_ supplychainresimediarelations_11636094&n=mrl_1020 https://www.accenture.com/us-en/insights/consulting/ closed-loop-spend-management https://www.accenture.com/us-en/insights/industry-x/ race-for-digital-operation-transformation 15 Supply Chain Transformation on the Cloud: What Executives Need to Know | Copyright © 2021 Accenture. All rights reserved.
  16. 16. AboutAccenture Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer Strategy and Consulting, Interactive, Technology and Operations services—all powered by the world’s largest network of Advanced Technology and Intelligent Operations centers. Our 506,000 people deliver on the promise of technology and human ingenuity every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities. Visit us at www.accenture.com FollowUs: Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.

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