Big Data Impact on Purchasing and SCM - PASIA World Conference Discussion
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Big Data Impact on Purchasing and SCM PASIA World Conference November 2014 Marriott Manila Philippines Bill Kohnen
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The volume, velocity and variety of data available is almost unthinkable. 90% of the world’s data is less than 2 years old, we are able analyze less than 5% of it and 80% of what people generally are looking at is less than 6 weeks old. Harnessing this data for effective decision making is a goal for organizations worldwide and has created a 50Billion dollar industry to provide tools and consulting. Even before “Big Data” Purchasing groups were swimming in data and struggled to put it to effective use. The success of Strategic Sourcing methodology had the effect of also identifying and standardizing the types and format of information that can be used to drive improvement. This discussion will connect how big data sources and methodology can be used to develop specific and relevant spend analytics. Also presented will be an illustration of how you can use data and tools you already have - to get immediate results and make you better prepared to evaluate the need for more powerful analytic tools. Finally will conclude with comments on how Big Data along with other disruptive digital trends will create a new required skill sets for Purchasing and Supply Chain Professionals and are transform how operate all ready.
Transcript of Big Data Impact on Purchasing and SCM - PASIA World Conference Discussion
Big Data Impact on Purchasing and SCM
PASIA World ConferenceNovember 2014Marriott Manila Philippines
Bill Kohnen
Discussion
• Big Data what’s the big deal?
• Big Data and Purchasing
– Where Data comes from– Formats– What you can do now
• How Purchasing and Supply Chain profession will be transformed
The volume, velocity and variety of data available is almost unthinkable.
90%
10%All Data
Less than 2 Years More than 2 Years
• 80% of what people are looking at is less than 6 weeks old.
• We can 5% of Data
• $50 Billion Big Data Industry
Text Buddies?
Trillions of Internet-connected sensors will produce as much as 40 percent of all data in the world by 2020Great for Philippines Technology
Simplified Corporate Data Structure
Structured Data
Enterprise Data
Warehouse
BI Analytics
Un Structured
Data
Open Source Non
Relational File System
Big Data APs
Data Creation Data Storage Data Action
Traditional Enterprise System
Big Data Non Traditional
Purchasing Is a Data Rich Enviornment
• Using analytics to tackle big data challenges, CPOs can benefit from new insights into internal and external business operations.
• They can reduce the risk of vulnerabilities and add greater strategic value to the Enterprise
• Marry customer trends and insights with supply base capabilities and opportunities
Bill Kohnen July 2014
Strategic Sourcing Defined Information that Drives Improvement
Bill Kohnen July 2014
Take Action
• Using Fairly basic Microsoft office functions you can conduct valuable analysis of lots of data
• You can do this without expensive specialized software that requires lots of training, support and on going cost
• Using this basic process may ultimately make you decide to pursue a specialized analytic tool set but by then you will understand very well what your needs and expectations are
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Get Basic Data From AP or ERP SystemHave a Senior level person with broad knowledge review and add other data as needed. A Senior person will save time as they will know the data and be able to make educated guess’s about any gaps on their ownSample End Format For Illustration
Supplier2012 Spend
2013 Spend
2014 YTDGrand Total
Category Owner BusinessPayment Schedule
Demand
Acme Spend $ 3,500,000 $ 1,500,000 $ 5,000,000 Direct Alex Aerospace N30 MRP Demand
Beta $ 5,000,000 $ 3,000,000 $ 300,000 $ 8,300,000 IT Ben Corporate N90 Capital Plan
Food Services
$ 120,000 $ 120,000 $ 70,000 $ 310,000 HR Kate Corporate N30 Monthly Recurring
Delta $ 300,000 $ 310,000 $ - $ 610,000 Facilities Kate Corporate N30 Annual Recurring
X Tron $ 850,000 $ 1,850,000 $ 1,250,000 $ 3,950,000 Indirect Jane Medical As NeededAs Needed Approval
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Chose What You Want To Review
Choose Fields You Want To Review
Bill Kohnen July 2014
Example of Top Suppliers
Advantages of Big Data BI Tools
• Data from all sources
• Ability to move seamlessly up and down data
• Intuitive use
• Still Requires Business Knowledge to set up and apply
CORPORATE PURCHASING
From 1887 to recently …………
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B2B Purchasing Transformation
B 2
B Pu
rcha
sing
Tra
nsfo
rmati
on
Big Data
Cloud
XaaS
Mobile
Open
IoT & M2M
TRADITIONAL B2B PURCHASING
+
SalespersonBuyer
Purchasing Machine to Machine Interface
Not likely anthropomorphic Buyers and Sellers
However the Internet of Things will result in 50 Billion Connected Devices soon which will enable efficiency way beyond common present linear notion of supply chains
2015 to 2020 Transformation
• Open Application (AP) based purchasing operating systems in use
• This common standard will drive unprecedented efficiencies
• Skills Valued– Category Expertise– Data Expertise– Value creation by linking Supply Chain to Customer– System and Process Integration– Ability to embed in other organizations
• Pool of purchasing professionals is global
• Expanded backgrounds in Computer Science, Engineering, and Science that are needed and might be more attracted to purchasing and supply chain.
