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Presented by Mr Steve Bayline, Senior Manager of IBM's Smarter Supply Chain Analytics at NUS-ISS on 12 Jun 2014.
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Steve Bayline
Senior Manager, Smarter Supply Chain Analytics
Smarter Supply Chain – IBM Case Study in Supply Chai n Transformation and Innovative Use of Analytics
© 2014 IBM Corporation
June 12, 2014
IBM Supply Chain Transformation & Role of Analytic s
© 2014 IBM Corporation
Select Supply Chain Analytics Solution Profiles
Lessons Learned and Skills
2 © 2014 IBM Corporation
The ISC is undergoing an analytics led, technology- enabled supply chain transformation
Globally Integrated Enterprise Smarter Supply Chain
New Era Supply Chain Reinvention
© 2014 IBM Corporation
� Enterprise efficiencies
� Streamlined Global processes
� Information sharing
�Advanced Analytics, Optimization, Big Data Management
� Supply Chain Transparancy
�Multi-enterprise supply chain transformation
Evolving Supply Chain Management from cost center to value center…
� Watson Enabled analytics
� Network Orchestration
� Agile / Resilient
� Visibility / Transparency
� Data Driven /Digitally Executed
Business Impact
� 2013 Cash Collected : $99B� 2013 Managed Spend : $53B� >20K Employees in 70 countries� $7B in procurement saving annually
� 18K+ suppliers connected online� >96% of invoices are electronic� 32 Smarter Analytics projects�Over 3.9M visits to eTools
3
Integrated Supply Chain Strategy in the New Era
New era workstreams
Analytics + ExpansionSystems of
Engagement
© 2014 IBM Corporation
Expand Cloud Capabilities
Differentiated Sales Support
ISC Supply Chain Footprint
Manage Opportunity� Lead
generation� Pricing� Salesforce
mgt
Source/Buy (Direct, Indirect)
Collect� Rev
accounting� Invoicing� AR� Align with
GA
Make Fulfill
IBM supply chain is broader than the traditional SC OR model
© 2014 IBM Corporation
Asset Management (Software & Hardware)
HardwareServices
Software Solutions
Plan
Asset Management (Software & Hardware)Traditional SCOR domain
Expanded ISC domain
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Cos
t
C
ash
C
lient
/ P
artn
er E
xper
ienc
e
BUSINES
�Centralized organization &
�Pervasive supply chain visibility
�Extended supply chain .. Opportunity to Order, Client engagement (including upstream, downstream)
Our current focus for innovation is driving towards critical Supply Chain 2020 capabilities
© 2014 IBM Corporation
Opportunistic Orchestrated Interconnected Solutions
Cos
t
C
ash
C
lient
/ P
artn
er E
xper
ienc
e
SS
IMPACT
�Point Solutions
�Decentralized
�Traditional Supply Chain applications
organization & strategy
�Formal prioritization process
� Initiate service and labor projects
� Initiate training programs for users
20102005 2011 2012 2015
�Solutions integrated into & execution processes
�Point solutions integrated across multiple analytics solutions and processes
�Widespread use of labor analytics
�Cloud enablement
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PrescriptiveCollaborate for maximum business
CognitiveDeeply analytical computing systems that
learn & interact naturally with people
What should we do about it?
Watson Analytics
We rely on several types of supply chain analytics to leverage Big Data
How do we optimize a dynamic, Big Data environment?
© 2014 IBM Corporation
DescriptiveGet in touch with reality, a single
source of the truth, visibility
PredictiveUnderstand the most likely future
scenario, and its business implications
Collaborate for maximum business value, informed by advanced analytics
What happened?
What will happen?
Volume (data at rest)
Velocity (data in motion)
Variety (many forms of data)
Veracity (data in doubt)
Big Data = All Data (structured, unstructured, internal, partner, publi c)
7
Clients are investing in solutions for visibility a nd business intelligence
Predictive Asset Performance
Predictive Maintenance
Mobile Workforce Management
© 2014 IBM Corporation8
A mining company uses analytics to improve asset performance and predict $3B of extra profit
Car manufacturerdevelops a “Battery Traceability System” to predict and improve hybrid and EV battery performance
Water Utility, integrates mobile workforce management solution with existing processes to provide real time two-way communication and access to inventory management for stock counts
We have built & deployed over 30 value-adding suppl y chain analytics solutions
Manage Opportunity
Request for Quote
Design Solution
Develop Proposal
Develop Contract
Manage Contract
Manage Order
Plan Demand Supply
Manufacture Deliver
Invoice & Accounts
Receivable
Post Sales
Support
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5 13
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2425 3132
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Quote to CashSupply Chain Business Process Framework
12 1215 15 15 15 3 2020 20 2021 2622
Source to Pay
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15 28
© 2014 IBM Corporation
SourceManage
Suppliers Commodities
Manage Supply
Execution
Procurement Engineering
Manufacture Engineering
Governance & Risk
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1215 15 15 15 3 2020 20 2021
2224 24 24 24 24 27
2622
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IBM Price Analysis Tool
Odds to Win
Shipped but uninstalled
Transaction Center Optimization
Global client dashboard
AR Optimization (NBA)
AR Optimization (DM7)
IBM Buy Analysis Tool
Forecast Accuracy Initiative
New Product Planning
Supply Capability Engine
Critical Parts Mgt Tool
Smarter Demand Shaping
Inventory Optimization
Transparent Supply Chain
Progile
Fuel Sur-charge Hedge
Global Logistics L&D
Client Value Assessment Tool
Supply Risk Management Tool
Advanced Airline Analytics
Catalog Data Optimization
Pipeline Yield Assessment
Quality Early Warning System
Asset Re-utilizatioin
Product Mgt Transform
Environmental reporting tool
Global Logistics Carbon Mngmt
Green Sigma
Proposal Text Analytics
PO Dispute Avoidance
CSP Propensity to Buy
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Implemented or extending
Development
Key
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IBM Supply Chain Transformation & Role of Analytic s
© 2014 IBM Corporation
Select Supply Chain Analytics Solution Profiles
Lessons Learned and Skills
10 © 2014 IBM Corporation
We harness advanced analytics to generate sustained value for IBM and our clients
Transaction Center Optimization
Quality Early Warning System� Predictive quality mgt
� Cost savings, brand protection
� Predict required staffing
� Reduce costs and improve service
Early detection
Staff Planning
Reduce Inventory
IBM use cases
� Collaboration platform with analyticsIBM Buy Analysis Tool
© 2014 IBM Corporation
� Radical transparency
� Synchronized analytics, mobileTransparent Supply Chain
11
IBM Buy Analysis ToolIBM Price Analysis Tool
� Price optimization
� Advanced analytics, speed
Best pricing
Total visibility
analytics
� Right product, right place
IBM Buy Analysis Tool
Critical Parts Management Toolset � Multi-enterprise transparency
� Predictive analytics
Supply assurance
QEWS identifies trends before traditional Statistic al Process Control
Results from QEWS POC at
external client
The Solution
Software system using proprietary IBM technology to detect & prioritize quality problems earlier with fewer false alarms, coupled with push alert functionality for IBM & suppliers to proactively detect & manage quality issues at any stage of product lifecycle
© 2014 IBM Corporation
external client
Key Benefits
�Cost savings – $50M (2015 IBM Financial Roadmap period), approximately $10M per year hard warranty savings, additional soft savings and benefits in other areas
�Proactive quality mgt – identify & resolve issues before they become problems, weeks or even months earlier than traditional SPC. Improved quality mgt processes overall
� Improved brand value – preserves customer satisfaction through maintenance of high quality standards, protects high-stakes product launches, protects brand image
Industry Recognition
� Recognized by the Publication ‘Information Week’ as leading innovator for 2012 in the Electronics Industry
12
Commercialization
� QEWS in Predictive Quality & Maintenance (PMQ) SWG product, client engagement underway
The Solution
Uses advanced analytics to balance workload and workforce, taking into consideration different skill sets and job requirements. Enables improved workforce planning, data-driven decision making, and insight into performance of dynamic
Transaction Center Optimization uses advanced analyt ics to manage the sales support workforce from opportunity identifica tion thru cash collection
Transaction Centers Optimization
Regional ForecastRegional Forecast
Local ForecastsLocal Forecasts
Team A Team B
© 2014 IBM Corporation
into performance of dynamic delivery environment.
Key Benefits
� Improves operational efficiency by aligning staff availability with predicted workload
� Optimizes workload by pooling capacity across teams and identifying cross skill opportunities
� Reduces overtime and variable labor contracting while improving delivery performance and services provided to sales force and business partners
� Integrated visibility
Capacity Analysis
Request Assignment and Prioritization
Executive Dashboard
TransactionForecasting
Key Features
13
IBM Buy Analysis Tool (iBAT) is a visibility and an alytical platform to enable better channel management & optimization
Industrial OEM
Contract Manufacturer
Value Added Reseller (VAR)
Tier 2 Distribution
Tier 1 Distribu-tion
Manufacturing Tier(s) Distribution Tier(s) End Custom ers
The Solution
Channel collaboration solution with advanced analytical modeling of daily demand signals to supply pipeline. Optimized replenishment decisions under price
Scope of iBAT
� Predictive analytics � Collaboration platform & data modelDSR
© 2014 IBM Corporation
iBAT enabled System X recognized by multiple awards
� Tech Data 2010 Inventory Optimization Partner of the year
� CRN Channel Champion award
� IBM Research “Outstanding Accomplishment” 2011
decisions under price protection constraints.
Key Benefits (accrue to both IBM & channel)
� Price protection expense reduce by 80%� Inventory reduced by 30%, aged inventory by 25%� Returns reduced by over 50%� Serviceability increase by 10%� Significant enhancement of visibility to channel
inventory, sales, other metrics � optimization opportunity
� Predictive analytics
� Incentive alignment� Channel collaboration & support processes
� Collaboration platform & data modelDSR
14
IBM Price Analysis Tool provides insight into “Profi t Optimized” winning prices on transaction requests
The Solution
Financial evaluation, simulation and win probabilities of multiple price points using recent, specific customer and general industry transaction and order histories.
Segmentation of bid win histories along numerous transactional characteristics enhance accuracy of optimal price recommendation
Gross Profit at Price Win Probability at Price
Optimal Price for Maximum Gross
Profit
Client pipeline opportunities
� Client: Transportation/cargo
© 2014 IBM Corporation
� Competitor solutions focus on off-the-shelf, retail products
� Patents granted on IBM solution
– Profit optimization of complex, variable and solutions
– Optimal win strategy for all elements of a multi-commodity solution
� Expanding roll-out at IBM across IBM products & geos
recommendation
Ability to price complex configurable products is first of its kind
Key Benefits
� Proven incremental revenue and profit
� Approved price responses delivered within three seconds – speed
� Smart service which can be interfaced to any system of engagement– Currently implemented with web and mobile
platforms
� Client: Industrial products , with complex configuration
� Profit max: Global footprint, local sources of supply, additional objective is capacity maximization
� Client: Transportation/cargo� Optimize profits given capacity of containers &
time element of fixed schedule. Further constraint is variable competition by transport lane
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Critical Parts Management Tool provides upstream mu lti-tier visibility with analytics & optimization
The Solution
Advanced analytical tool provides visibility, management & optimization of critical parts across all upstream tiers of supply chain
Key Benefits
�Comprehensive network visibility,
© 2014 IBM Corporation
�Comprehensive network visibility, 75K+ SKUs, 100+ suppliers
�Resource savings of 50%+ of costs of managing shortages (expedites, personnel, etc)
�Higher levels of Customer Satisfaction, on order of 20%+
�Allowed significant agility in handling supply constraints in Asia during 2011 and 2013
Industry awards in 2012
� Institute Supply Mgt: Excellence in Supply Mgt
� ML100 Manufacturing Leadership award
16
Days to close an issueCritical parts issues
2010 20132010 2013
The Solution
• The solution consolidates events across the end-to-end value chain, and applies advanced analytics for optimized cost, service levels and client experience
• provide visibility across existing applications and data sources to create a predictive and smarter supply chain
Our Transparent Supply Chain approach will provide 360 degree visibility to many KPIs, and an analytical platform to manage them
Key early functionality� Visualization, multi-
enterprise, cross functional
� Order tracking, progression
� Supply prediction
� Point analytics synchronization
© 2014 IBM Corporation
Global Consolidated
View
Brand/BU
Site
Partner/Client
Key Benefits
� Consolidated information framework – one version of the truth, actionable alerts, drill-down capability
� Initiates recovery either automatically (self-healing, resilient SC) or through decision feedback loops
� Advanced analytics and optimization – synchronized and ubiquitous
� Predict and act to optimize client experience� Collaborate continuously in real-time across IBM and
with partners
17
IBM Supply Chain Transformation & Role of Analytic s
© 2014 IBM Corporation
Select Supply Chain Analytics Solution Profiles
18 © 2014 IBM Corporation
Lessons Learned, Skills, and the Future
Project deployment & readiness to change
Iterative approach
Lessons learned – how to establish momentum & succes s with analytics
� Start with a business pain point� Have a visualization and user interface strategy
� As critical as the math and analytics expertise are, transformation leadership and execution/ operations expertise is even more important (3-in-the-box management system)
� It is OK to start small and buildstart small and build towards major impact
�� Iterative approachIterative approach allows you to improve your capabilities along the way and build progressively stronger stakeholder support
© 2014 IBM Corporation
Incentive alignment
� Design Compelling business benefitsCompelling business benefits for each supply chain participant (win/win/win)
� Reflect benefits in terms and conditionsterms and conditions
�� Encourage utilization with Encourage utilization with PBCsPBCs
� Incorporate cycles of learning into the analytics solution
19 Smarter Analytics
Three in the Box Management System and Skills
Analytics Team(Data Scientist)
Transformation Team(Change Agent)
Operations Leader(Domain Expert)
•Statistics & Math
© 2014 IBM Corporation
•Statistics & Math
•Analytics Software & Modeling
•Scripting
•Analytics Architecture
•Data Technology• Data Base
• Big Data
•Visualization
•Project Management
•Change Management
•Application Development
•Application Architecture
•Business Process Development
• Implementation
•Business Knowledge
•Contextual data knowledge
•Execution management
•Business Metrics
•Training
Cloud
Attain Supply Chain Transparency
Leverage Big Data & Advanced Analytics
IBM supply chain network – 2020 vision
Analytics
Mega trends influence the development of key strategic SC capabilities
© 2014 IBM Corporation
Extend Multi-enterprise Supply Chain Transformation End-to-End
MobileSocial
Mega trends in Computing Critical 2020 SC Capability21
Risk RoverQuality Quasar Procurement Prognosticator
The ISC expansion to Watson for development of Smar ter SC Analytics with cognitive capabilities
Understands: natural language and human communication
Adapts and learnsfrom user selections and responses
1 2Ask Discover
Investigate ways Watson to can help solve supply chain problems using analysis of unstructured data
© 2014 IBM Corporation
• Diagnosing client reported HW, SW and services problems.
• Monitoring client quality and issues and proactively recommend actions based on quality patterns
• Propose total risk management based on multiple factors
Prognosticator
• Recommend sources for product/service/ solution at best cost, quality, delivery & risk based on requisition or RFx/proposals needs
Generates and evaluatesevidence-based hypothesis3Decide
…built on a massively parallel
architecturePossible ISC Uses & IBM Showcase
opportunities
22
Questions & answers… and thank you
© 2014 IBM Corporation23