A forward-looking view of supply chain processes and technologists by Lora Cecere, Founder of Supply Chain Insights. Presented in September 2017.

2. Supply Chain 2030
September 2017
For the Supply Chain Leader Who Wants to Rise Above

3. I Am A Social Scientist

4. A Skeptic

5. A Bit of a Curmudgeon…

6. A Fortune-teller of Sorts….

7. I Write for the Supply Chain Leader

8. Today’s Reality

9. What I Believed

11. Only 12% Of Companies Are Driving Improvement and Performance
Better Than Their Peer Group at the Intersection of Operating Margin
and Inventory Turns.

12. The Supply Chain Is a Complex System with Increasing Complexity.
Each Supply Chain Operates on an Effective Frontier

13. The Supply Chain Is a Complex System with Increasing Complexity. Each
Supply Chain Operates on an Effective Frontier

14. What Makes a Difference?

15. Dow and BASF

16. 2004
2016
2004
2…
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
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13.0
-0.03 -0.01 0.01 0.03 0.05 0.07 0.09 0.11
InventoryTurns
Operating Margin
Toyota Honda
Best
Scenario
HMC
0.06, 6.88
TM
0.06,
11.35
Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2004-2010 from YCharts
Toyota and Honda
Operating Margin vs. Inventory Turns (2004 – 2016)

17. What Drives Value?

18. Managing in a Complex World

19. Trade is Growing While Growth is Slowing

20. Supply Chains to Admire:
2017 Winners

24. What Did I Learn?

25. Improvement IS Fast When You Have a Lot to
Lose

26. Manage Costs Like a Decathlete

27. Efficient Is Usually Not Effective

28. Fads Get Us Nowhere

29. Best Transformations Require Wings and Feet
Aspirational Leadership
and Process Innovation
Grounded in Goals

30. Moving Forward: Supply Chain 2030

31. Productivity From the Third Industrial
Revolution Stopped in 2004

32. What Is Next-Generational Thinking?

33. The Move to Digital Business
Telematics

34. Shifts for 2030

35. Current Supply Chain Process Thinking
Rows and Columns:
Transactional Data
Fixed Hierarchies with
Structured Data
One-to-One Enterprise Linear Flows
Descriptive and Predictive Analytics

36. • Autonomous Supply Chain: Automation of supply chain processes through cognitive learning and
artificial intelligence eliminating labor and reducing the need for people to touch data.
• Value Chain Uberization: A platform to enable shared resources across a community.
• 3D Printing: Localization of manufacturing through the sharing of digital images using additive
manufacturing.
• Internet of Things: The use of machine-to-machine streaming data to improve supply chain
outcomes.
• Multi-Tier Networks and Redefinition of B2B: The building and execution of multi-tier networks
for data sharing, collaborative workflows, and improved decision making. This includes a
discussion of blockchain, network canonicals, and interoperability.
• Cloud-Based Computing. The promise of cloud is federation and democratization of data, in both
private and public clouds, with the promise of lower cost of ownership.
• Listening: The use of unstructured data–social sentiment, warranty, and quality data–to improve
organizational productivity and outside-in processes to be market-driven. Market-Driven Value
Networks is a more mature definition of demand-driven.
What Does Digital Transformation Mean for
You? There Is No One Definition

37. Trend #1: Outside-In Processes

38. Today’s Reality

39. Traditional Approaches of ERP/MRP/DRP Amplify the Bullwhip
Effect

40. The Long Tail of the Supply Chain. The Impact of
Outside-In Processes

41. POS Cost Profile by Year
2006 - 2009
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WMT Week
BaseIndex
2006 2007 2008 2009
Claritin Case Study: Spring and Allergies
• 40% of Annual POS done in 16 spring weeks
• Every Year the Season Flows Essentially the Same In Aggregate
– WM Store and DC build strategies the same across the country
Source: IRI

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WM WEEK
POSBASEINDEX
Profile CA-40 MID-N SOUTH NORTH PAC
Wal-Mart Allergy Regional Inventory Flow
• Utilized store level data to develop 5 regional profiles based on average 5
year POS
– Worked with Walmart to develop Store and DC Build and Exit
Strategies Based on Profiles
– Implemented Throughout Entire Allergy Category at Walmart

43. The Need to Listen

44. Trend #2: The Autonomous Supply
Chain

45. Data Needs to Move Securely Through Value
Networks In…
Clouds Streams Pools

46. Need for New Forms of Analytics

47. Autonomous
Supply Chain
Cognitive Computing
Machine Learning
Text Mining and
Pattern Recognition
Predictive and
Prescriptive Analytics
Building the Autonomous Supply Chain

48. Evolution of Cognitive Computing

49. SILO VISIBILITY LEADS TO INEFFICIENT AND UNPRODUCTIVE
WORKFORCE
49
More than 80% of network activity resides outside the
four walls of an organization

50. JABIL’S INTELLIGENT DIGITAL SUPPLY CHAIN SOLUTIONS
50
Advanced Analytics, Visibility, and Orchestration tool
set

51. JABIL’S APPROACH TO DIGITAL SUPPLY CHAIN
CONTROL TOWER CENTERS. WHERE CUSTOMERS SEE VALUE™
VISIBILITY CLOUD AND MOBILITY
CROSS-FUNCTIONAL
INTELLIGENCE
EMBRACING COMPLEXITY
Because it continues to be the
foundational supply chain
challenge
Because supply chains are
evolving into complex
ecosystems
Because supply chains
operate in silos
Because supply chains
are dynamic

52. Trend #3. Real-Time Data

53. Redefining
Time

54. 1.5M sku locations
~ 95% slow or intermittent
Seasonal demand (at the item level) is identified down to a
specific location.
Simplified for clarity In reality, looks more like this
•365 days
•150+ local climates
•Avg 3,000 items / location (165M)
•15 year lifecycle changing amplitude
Lennox International

55. •Replace
•Compressor
•Engines
• Dealer gets service event
• We get parts sales
• Customer has non-event
• Customer - Dealer & Brand loyalty
Your compressor shows that it will fail within
the next 30 days. What day would be good
for us to come replace it?
Redefining Service

56. Internet of Things

58. Rich user interface in full HD
Evocative sound track with
burring grinder and tinkling
of spoons
Memorable flavours and
fragrances
Cutting edge reliable /
ultra efficient computer
processing hardware
Stunning curved design by
Italian automotive designers
Irresistible aromas of Costa’s coffee
shops
Innovative coffee-making
system providers
Redefining Replenishment

59. Transforming Inbound Logistics
Mobile Device Apps
AIS Vessel Location
Sensors

60. Improved On-Time Delivery

61. Trend #4. Digital Manufacturing

62. What Is Digital Manufacturing?
Additive Manufacturing Paperless Processes Robotics

63. Evolution of 3-D Printing Organs

64. Ultimate Ear

66. Material Andon
Material Kitting/Picking
Apple watch was the perfect “off the shelf”
solution for connecting the tugger driver
with the indexing of the line.

67. The AH-HA moment…AGCO Jackson Strategic Internet of Things (IoT)

68. Trend #5: Network of Networks

69. The adoption of distributed and open technology by
the ecosystem of technology providers and business
users to drive inter-operability in value networks to
improve business outcomes.
What Is the Network of Networks?

70. What Did Not Work

71. The View in 2016

72. Network and Company Nodes
Community
Directory of
Supplier Data
Blockchain Blockchain Blockchain

73. Write once and use company and contact information
many times.Community Directory
• Reduce onboarding through once source of data.
Blockchain redefines visibility and track and trace.Traceability
• Confluence of Blockchain and Spark/Internet of Things Redefine Lineage.
Bitcoin and Blockchain disintermediate traditional
banking.Supply Chain Finance
• Emergence of the supply chain digital wallet
• An alternative to EDI
Cognitive computing eliminates the need for master data
management and standards.Interoperability
• Data is mined through patterns and translated for context through cognitive
computing. Shift from standards to process canonicals.
What Could Change?

74. Moving Forward

76. • Remove the handcuffs. Eliminate the expectation of well-
defined ROIs.
• Develop a stage-gate process for process innovation.
• Embrace small scrappy teams.
• Partner with technology innovators.
• Manage the hype cycles.
Have the Talk with Your CFO

77. Wrap-up
• Adopt new technologies and
challenge current thinking.
• Manage the supply chain as a
complex system.
• Build with the goal in mind
outside-in.

78. Time to Take a Different Path?

80. Visit Us Online
www.supplychaininsights.com
www.supplychainshaman.com
www.beetfusion.com
www.linkedin.com/company/supply-chain-insights
www.slideshare.com/loracecere
Follow Us on Twitter
@scinsightsllc
@lcecere
Attend a Live Event
www.supplychaininsightsglobalsummit.com
www.supplychaininsights.com/the-shamans-circle

81. About Lora Cecere
• Founder of Supply Chain Insights
• “LinkedIn Influencer”
• Guest blog for Forbes
• Author of 5 books: Bricks Matter (2012), Shaman’s Journal (2014),
Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015),
Shaman’s Journal (2016), Shaman’s Journal (2017)
• Partner at Altimeter Group (leader in open research)
• 7 years of Management Experience leading Analyst Teams at Gartner
and AMR Research
• 8 years Experience in Marketing and Selling Supply Chain Software at Descartes
Systems Group and Manugistics (now JDA)
• 15 Years Leading teams in Manufacturing and Distribution operations for Clorox,
Kraft/General Foods, Nestle/Dreyers Grand Ice Cream and Procter & Gamble.
Contact Information:
• Email: lora.cecere@supplychaininsights.com
• Blog: www.supplychainshaman.com (15,000 pageviews/month)
• Forbes: www.forbes.com/sites/loracecere
• Twitter: twitter.com/lcecere (8,200 followers)
• LinkedIn: www.linkedin.com/in/loracecere (215,000 followers)
• LinkedIn Influencer: www.linkedin.com/today/author/446631

83. Thank You