BROWN_R_WEEK_EIGHT_DDBA_FINAL_PAPER ver 02.28.2016 Final

Running head: BUSINESS ANALYTICS IN SUPPLY CHAINS 1

Business Analytics Innovations in

Supply Chain Value Discovery

Robert L. Brown

Walden University

BUSINESS ANALYTICS IN SUPPLY CHAINS

Abstract

Business Analytics can provide insight into the complex multidimensional supply chain systems

to help create value federations. Prior to data analytics the synergies that exist within the

complexities of interconnected and interwoven supply chains could not easily be detected. Using

IBM’s SPSS Software and Watson Artificial Intelligence System, supply chain managers now

have enormous strategic insight into the potential value that can be generated from traditional

supply chains that can now be transformed into Value Federations. The synergetic relationships

between multiple suppliers within a value federation to create more product, goods and services

allows the creation of more value, employment and entrepreneurship.

Keywords: business analytics, IBM SPSS, Watson, artificial intelligence

2


Business Analytics in Supply Chain Value Discovery

Businesses in the 21st face tremendous challenges in managing their supply chains and

vendor relationships. Disruptions in the supply chain, that are now business systems of vast

interconnected complex webs of communication methods, logistics controls, transportation

systems and computer Enterprise Resource Planning (ERP) systems is a new emerging science

of management in and of itself (Mandić & Delibašiś, 2012). The level of education and training

required of employees in all these areas is reaching near graduate level education and the

pressure, emotional and cognitive, on the employees to manage the complexity factor is

exponentially increasing.

Business Profiling

Vendors and customers are often not in strategic alignment with each other’s core

business goals. In some cases, the nature of the relationship can be a strained antagonistic

cognitively emotional combative mental state in which the customer treats the supplier as a

subservient entity that only exists to the serve the needs of the customer, and not seen as an end

in and of themselves. Walmart Corporation throughout the 1990’s was notorious for many harsh

practices on their suppliers has now become a partner with their suppliers and in many cases

have helped raised their supplier profits by 18% (Huang, Nijs, Hansen & Anderson, 2012).

Indeed, Walmart. Kmart, Sear and Target have learned the hard lesson that a virtuous circle of

profitability for both customer and the supplier is critical to maintain the stability of the supply

chain or what I choose to call the Value Federation. (VF).

Business Process Mapping

3


Information Technology (IT) trained supply chain managers, VF managers, Business

Systems Scientists and supply chain support staff need to consider the concept of business

process mapping (Norshakkira, 2015). Business process mapping should consist of the writing

down, graphically representing or virtual world simulations actual physical, financial, legal,

environmental impact and human dimensions of the relationship between customer and supplier.

The business process mapping should also include the managerial expectations on both sides of

the performance grading methods. Additionally, and more importantly for Business Systems

Scientists, the business process mapping should identify the computer systems ERP and

capabilities to try and discover if the ERP systems and human understanding of those systems

are compatible.

The business process maps and experiments should be determined if the ERP systems

can automatically work together to save human time from entering data and having human error

creep into the data entry process for example (Norshakkira, 2015). Expert Systems (ES) and

Artificial Intelligence (AI) are now becoming capable to help manage and direct through

forecasting models the actual strategic setup of sales orders, vendors’ orders and production

scheduling (Gunasekaran & Ngai, 2014). Developing a business process modeling can be

developed to determine the type of AI or Virtual Employee systems to help manage the ERP

system relationship between customers and suppliers at the lower levels and mundane processes

of the mutual business interaction.

Using IBM’s SPSS software, IT supply chain professionals can now create experimental

models that can create speculative forecasts on a variety of potential supply chain issues, ranging

from marketing changes, political unrest, ecological pressures and financial markets volatility to

4


create buffer inventories, alternative supply lines or to stop purchasing items if a looming

financial disruption is becoming a potential reality. Using IBM SPSS statistical modeling

software and Second Life’s Virtual World simulation capability will give the IT supply chain or

VF professional, enormous advantage over traditional logistic planners relying on simple

spreadsheets using rules of thumb (Sharma, Qiang, Wenjun & Qi, 2013). In order to test these

experimental models, using Second Life, IBM SPSS and IBM’s AI system Watson are all within

reach of those professionals that choose to learn these systems. In order to create regional supply

hubs, these virtual simulations need to be tested prior to implementation to prevent costly

mistakes in the designs of the supply chains and logistics systems.

Creating Regional Hubs

Suppliers need to broadened their horizons on what markets they can serve. The current

world wide unemployment crisis amongst young people could be mitigated by creating job

banks of work that a particular region needs to supply (Caruso & Gavrilovay, 2012). The current

system of employment is often haphazard and chaotic and is not viewed as a regional system

issue. In many cases a supplier receives a large sales order to fulfill, the supplier does not have

the labor or intellectual capital to complete the job for the customer Independently the supplier

through internal resources of the Human Resource department, tries to fulfill the human capital

demand. Alternatively, suppliers that see themselves as part of a VF, could trade workers and

create a flexible workforce model to provide more labor and intellectual capital cooperatively to

fulfill customer needs. Capitalizing on a region’s cultural, ethnic and ecological diversity or

specificity of human capability of that region, could lead to the mass expansion of businesses

and create centers of excellence in all regions of underperforming areas of Value Federations

5


(Cirullies, Schwede & Toth, 2012). Cultural differences which are often the source of conflicts

could become if managed, through regional centers, that promote profitability of all participants

into an engine of creative energy derived from the cultural and regionally difference to promote

innovative business creation.

Collaborative Governance

In many supplier and customer relationships, there is reluctance to share information,

technologies and human capital. This reluctance is based on the fear that someone in the supply

chain will steal important capabilities and in doing so damage or bankrupt a partner within the

supply chain (Lawler & Sillitoe, 2013). Peter Senge has created the idea of the Learning

Organization to create an educational model of sharing ideas, management formulas and even

dreams to create a dynamic self-recreating organization that is organic in nature, meaning

change and growth come from within, and an organization that seeks others of its own kind to

share and cooperate (Lawler & Sillitoe, 2013). In the area of Value Federations especially, in

regional centers and cultural hubs, the sharing of resources from work spaces, shop floors,

technology, computing power, human capital and managerial capabilities is becoming a

necessity to drive the costs of production down while not creating mass unemployment and civil

unrest through the process of Lean Manufacturing and Economies of scale (Lawler & Sillitoe,

2013). The Learning Value Federation and Senge’s Learning and sharing federations will

become the new norm to create more businesses versus the current model of destructive

competition that reduces the number of suppliers and jobs.

Communication

6


The philosopher David Hume states, “that nothing is more free than the imagination of

man” (Locke, Berkeley & Hume, 1990). By using and unleashing human imagination and

allowing people the freedom to use their imagination, the most powerful force known to human

beings, supply chain managers will be capable of creating intelligent communication systems.

Human imagination along with interconnected ERP systems to automatically communicate

between the various nodes along the complex web of bundles of supply chains that are the

components of Value Federations will fundamentally transform al businesses (Mandić &

Delibašiś ,2012).

Management teams must be willing to allow their supply chain managers to create

intelligent signal systems and methods within the supply chain. These intelligent signals may be

composed of email Kanban, interactive Artificial Intelligence systems and supply chain

simulations experiments within virtual worlds such as Second Life (Sharma et al., 2013). Virtual

world technology that for example can simulate potential inventories with the addition of AI

virtual assistance that are capable of decision making 24/7 prevent supply chain disruptions.

These new Virtual Employees that can control ERP systems will be able to make real time

adjustments to disruptions or emergency orders within the supply chain. Virtual Worlds are the

frontiers of logistic and supply chain management to manage both tangible and intangible

(software, virtual machines, virtual employees) capabilities.

Seamless Networking

In order to create the business concept of seamless networking, teams from the various

customers and suppliers within a Value Federation should at first create virtual simulations,

using simple paper sticky notes up to and include virtual worlds and game theory to determine

7


the best course of action (Chen, 2012). Business Systems Scientists can conduct experiments on

existing supply lines and by utilizing IBM SPSS statistical software begin to detect emerging

potential changes to the existing business model that can affect the entire supply chain

(Gunasekaran & Ngai, 2014).

Additionally, Artificial Intelligence can be used help monitor the conduct of participants

within a supply chain that can moral guidance systems of conduct for suppliers and customers

that transcend the management team’s ability to monitor the individual activities of employees

within the typical customer and supplier relationship (Rodgers, Söderbom & Guiral, 2015).

These new systems will create mediation systems to prevent conflict and exploitation from

entering the business equation. The ideal of moral and ethical seamless relationships is critical to

maintaining the supply chains of the future.

The prevention of the exploitation of employees, customers, indigenous people and the

environment is imperative to creating a sustainable supply chain (Rehman & Shrivastava, 2011).

Seamless Networking should also provide the interconnection and mutual respect of both parties

and for all parties’ that participant in and are impacted by the supply chain process (Rehman &

Shrivastva, 2011).

Placing members of the suppliers’ teams onsite at the customer to be able to efficiently to

examine and resolve the customer’s issue at a large scale production site is also a key concept to

create seamless networking in the Value Federation. This concept of embedding the supplier or

customer agents at each other’s work sites is an additional method to create seamless business

relationship (Schmeltz, 2014).

Training Alignment

8


Peter Senge’s work of collaboration has now evolved into the concept for training and

education model entitles the Triple Focus (Goleman & Senge, 2014). The Triple Focus is the

concept that focuses on cognitive social and emotional learning as well as more traditional task

driven outwardly focused education. Leadership teams and managers are well aware of the

emotional distress deadlines, failed aspirations, improper organizational alignment of goals and

resources that can cause intense emotional distress of employees along an entire supply chain

(Goleman & Senge, 2014). Supply chains should be designed and managed by trained

professionals within the supply chain that understand the social and emotional effect of their

decisions. These professional should be held accountable for the health, happiness and

motivation of their various teams that in the long run will create sustainable supply chains. The

Triple Focus type of educational and training alignment that is directed towards the entire supply

chain is critical to manage the shifting demographic and generational shift taking place in the

work forces of the world.

9


Figure 1 Disruptive Innovative Forces

Innovations and Disruptive Technologies

Virtual World technologies and virtual employees are two major technologically

disruptive forces that will impact all businesses and their supply chains in the near future. Many

computer scientists predict a mass unemployment crisis that will impact the world from the use

of Artificial Intelligence, robots, drones and the increasing use of software to manage businesses

(Ford, 2013). The introduction of new these new intelligent machine technologies with a Value

Federation could unleash mass unemployment, bankruptcy of companies and social unrest. How

are IT supply chain or Value Federation managers to innovate without violating the perceived

social contracts of employees to have work and to be able to provide for themselves? Referring

to Peter Senge’s Triple Focus of (1) cognitive empathy, (2) emotional empathy and (3) empathic

concern is a good place for managers to focus (Goleman & Senge, 2014).

10


In order to maintain supply chain and even the businesses model themselves, individual

citizen consumers that are the reason supply chains exist, need to be able to have purchasing

power. Unemployed or under employed people have little to no buying power. In order to

managed the complex webs of the bundles of supply chains that comprise Value Federations, the

mechanistic model of efficiency of the past that does not consider the impact on human beings in

general and in particular indigenous people, cultures, animal life and the environment are failed

models in that they do not contain Senge’s Triple Focus (Goleman & Senge, 2014).The lack of

cognitive empathy and emotional empathy coupled with the rise of AI may become the greatest

threat to the business cycle and supply chains the world has ever experienced (Cirullies,

Schwede & Toth, 2012). Value Federations will require the engineering of cognitively

emotionally aware business cultures to create a balanced humane model of operation.

Figure 2 Synthesis of Ideas

11


Synthesis Discussion on Virtual Employee, Virtual Environment Supply Chain

Management

The proliferation of virtual world technology from Facebook’s Farmville, World of War

Craft, Guild Wars and Second Life, to name a few online systems, provides new innovative

models to create simulations on the impact of changes to supply chains (Cirullies, Schwede &

Toth, 2012). My initial experiments using Second Life and Farmville show that new supply

chain models can be tested effectively at virtual no cost to a business other than time of the

employee to run the simulations and tests (Krom, 2012). Peter Senge’s term, “networks of

collaborations” that are possible with people from all over the world to test before

implementation of alterations of the supply chain.

Future experiments for business systems scientists should include multiple running

simulations in virtual world technology using virtual characters using a small number of

variables to monitor the efficiency of Lean Manufacturing initiatives for example (Chen, 2012).

Using Facebook’s Farmville, the loss of crops or deforestation can be simulated to determine the

impact on wildlife within a virtual supply chain experiment. Using IBM SPSS software, business

systems scientists can create experiments that can be tested using virtual characters and virtual

environments that can begin to business leaders an ability to sense the potential emerging futures

and new business realities.

Business Systems Scientists now have the capabilities to study current supply chains or

Value Federations to detect a baseline of efficiency, cognitive emotional intelligence, impact on

people and the environment (Cirullies, Schwede & Toth, M. (2012). The cognitive shift for

Business Systems Scientists (BSS) that study supply chains should consider having these virtual

12


experiments running to create alternative hypothesis to the current supply chain paradigm that

exists in the physical world. Supply chains are a fascinating realm of study for BSS and Doctor

of Business Administration (DBA) to examine with scientific methods, tools and software.

Conclusion

Value Federations must become learning organizations that include and allow innovation

and promote cognitive emotional intelligence to create value systems that promote sustainable

business without sacrificing human beings, and the environment for short term profitability.

Business leaders, Supply Chain managers and Information Professionals must prepare for the AI

revolution that is fully underway and will begin to transform all aspects of business (Lawler &

Sillitoe, 2013). IBM’s Watson and SPSS software are critical tools for professionals to

understand and to master. Billions of smart phones with Apple’s Siri, Google or Microsoft’s

Cortana are the new virtual employees that billions of people now have easy access to (Leber,

Weber & Adam, 2014). The challenges presented are currently underway and IT professionals

and business leaders need to focus on the design of sustainable, humane cognitively emotionally

balanced systems to build sustainable Value Federations.

13


References

Caruso, R., & Gavrilovay, E. (2012). Youth Unemployment, Terrorism and Political Violence,

Evidence from the Israeli/Palestinian Conflict. Peace Economics, Peace Science, &

Public Policy, 18(2), 1-35. doi:10.1515/1554-8597.1254

Chen, J.-X. (2012). Multiple criteria ABC inventory classification using two virtual items.

International Journal of Production Research, 50(6), 1702–1713.

Cirullies, J., Schwede, C., & Toth, M. (2012). Intra-simulative ecological assessment of logistics

networks: Benefits, concepts, and tool enhancement. Proceedings Title: Proceedings of

the 2012 Winter Simulation Conference (WSC), 1.

Ford, M. (2013). Viewpoint: Could Artificial Intelligence Create an Unemployment Crisis?

Communications of The ACM, 56(7), 37-39. doi:10.1145/2483852.2483865

Goleman, D., & Senge, P. (2014). The Triple Focus. Reflections, 14(1), 31-34.

Gunasekaran, A., & Ngai, E. W. T. (2014). Expert Systems and Artificial Intelligence in the 21st

Century Logistics and Supply Chain Management. 21st Century Logistics and Supply

Chain Management, 41(1), 1–4. http://doi.org/10.1016/j.eswa.2013.09.006

Krom, C. L. (2012). Using Farmville in an Introductory Managerial Accounting Course to

Engage Students, Enhance Comprehension, and Develop Social Networking Skills.

Journal of Management Education, 36(6), 848-865.

Lawler, A., & Sillitoe, J. (2013). Facilitating ‘organizational learning’ in a ‘learning institution’.

Journal of Higher Education Policy & Management, 35(5), 495-500.

doi:10.1080/1360080X.2013.825415

Leber, M., Weber, C., & Adam, F. (2014). Mobile Application as an Innovative Supply

14


Chain Concept and the Impact of Social Capital. International Journal of Simulation

Modelling (IJSIMM), 13(2), 135–146.

Locke, J., Berkeley, G., & Hume, D. (1990). The empiricists. New York: Anchor

Books/Doubleday.

Mandić, K., & Delibašiś, B. (2012). Application of Multi-Agent Systems in Supply Chain

Management. Management (1820-0222), (63), 75–84.

Rehman, M. A. A., & Shrivastava, R. L. (2011). An Innovative Approach to Evaluate Green

Supply Chain Management (GSCM) Drivers by Using Interpretative Structural Modeling

(ISM). International Journal of Innovation & Technology Management, 8(2), 315–336.

Norshakkira, A. A. (2015). Web Based Expert System to Identify Trusted Partner for B2B

Collaboration. Journal of Theoretical & Applied Information Technology, 79(3), 65–

369.

Plinere, D., & Borisov, A. (2014). Development of Ontological Knowledge Model for Raw

Materials Management Task. Darja Plinere, Arkādijs Borisovs. Ontoloģiskā Zināšanu

Modeļa Izstrāde Izejvielu Pārvaldības Uzdevumam., 17, 61–65.

Huang, Q., Nijs, V. R., Hansen, K., & Anderson, E. T. (2012). Wal-Mart’s Impact on Supplier

Profits. Journal of Marketing Research (JMR), 49(2), 131–143.

http://doi.org/10.1509/jmr.10.0256

Schmeltz, L. (2014). Identical or Just Compatible? The Utility of Corporate Identity Values in

Communicating Corporate Social Responsibility. Journal of Business Communication, 51(3),

234–258.

15


Sharma, G., Qiang, Y., Wenjun, S., & Qi, L. (2013). Communication in virtual world: Second

life and business opportunities. Information Systems Frontiers, 15(4), 677–694.

Visich, J. K., Gu, Q., & Khumawala, B. M. (2012). B2C Mass Customization in the Classroom.

Decision Sciences Journal of Innovative Education, 521.

Rodgers, W., Söderbom, A., & Guiral, A. (2015). Corporate Social Responsibility Enhanced Control

Systems Reducing the Likelihood of Fraud. Journal of Business Ethics, 131(4), 871–882.

16

Documents

BROWN_R_WEEK_EIGHT_DDBA_FINAL_PAPER ver 02.28.2016 Final