Presentation on Big Data

Big Data Supply Chains

Go Big or Go Home!

Big Data will be the NEW Foundation of the Future

Supply Chain

BRICKSMatterThe Role of Supply Chains in Building Market-Driven Differentiation

LORA M. CECERE CHARLES W. CHASE JR.

BookPublishes in August

2012

p. 4Supply Chain Insights, LLC © 2012

Agenda

Current State

What is a Big Data Supply Chain?

How will Applications Change?

Wrap-up


Inside-Out Inside-Out

Supply Chain Tipping Points

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

S&OP

Evolution of the PC

JIT

Theory ofConstraints

Supply Chain Organization

Re-Engineering the Organization

(Michael Hammer)

Internet/Email

eProcurement

Total QualityManagement

RFID

Vertical SiloExcellence

Efficient Order toCash Processes

+ Islands ofExcellence

ManufacturingExcellence

+

Supply Chain Excellence = Supply Chain Excellence =


Inside-Out Outside-In

Value-Based OutcomesDelivered by Horizontal Processes

+

Supply Chain Excellence = Supply Chain Excellence =

Supply Chain Tipping Points

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Y2K

Lean Six Sigma

.com

Demand Driven Concepts

Vertical SiloExcellence

Outsourcing Effectiveness

Social Responsibility

CSCO

Market-Driven Value Networks


An adaptive network focused on a value-based outcome that senses and translates

market changes (buy and sell-side markets) bi-directionally with near-real time data latency to align sell, deliver, make and

sourcing operations.

What is a Market-driven Value Network?7


Evolution of Supply Chain Process Excellence

Align:Market Driven

ResilientReliable

Adapt:Demand-Driven

Efficient

Building Horizontal Process Connectors

ContinuousTesting

LearningImprovingIn Market

OrchestrateDemand and Supply

Sense Demand

and Supply

Shape Demand andSupply based

on Market

DemandVolatility

Supply Volatility

Right Product

Right Place

Right Time

Right Cost

Cost

Procure to pay/order to

cash


What is Supply Chain Excellence?

Base: Total Sample (61)

Q14. How does your company define supply chain “excellence?” Please select all that apply.

Right product, right place, right time at the right cost.

A responsive supply chain that can adapt as markets change.

A resilient supply chain that can withstand the shocks of demand and supply volatility.

The Efficient Supply Chain. Lowest cost per unit.

Right product, right place, right time.

70%

57%

52%

38%

20%

How Define Supply Chain “Excellence”

Most Mature


The Effective Frontier


A Supply Chain

is a Complex System

with Complex Processes

with Increasing Complexity


98%

97%

93%

90%

80%

79%

72%

70%

59%

44%

Order Management

ERP (Enterprise Resource Planning)

Demand Planning

Production Planning

Tactical Supply Planning

Warehouse Management

Manufacturing Execution Systems

Transportation Planning

Price Management

Product Lifecycle Management

61%

64%

39%

33%

36%

30%

34%

38%

34%

26%

15%

8%

31%

25%

18%

16%

10%

20%

13%

8%

23%

25%

23%

33%

26%

33%

28%

13%

11%

10%

Operational IT Systems

1 System 2 Systems 3+ Systems

IT Systems:Quantity

Base: Total Sample (61)Q15. For each of the following IT systems, please indicate how many you currently have operational – 0 systems, 1 system, 2 systems or 3+ systems.

Any Systems


IT Systems: Importance & Satisfaction

Demand Planning

Enterprise Resource Planning

Order Manage-

ment

Tactical Supply

Planning

Price Manage-

ment

Production Planning

Transportation Planning

Product Lifecycle Manage-

ment

Manufacturing Execution Sys-

tems

Warehouse Management

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

86% 83%80%

76% 75% 73%

65% 63%59% 58%

30%24%

35%

20%28%

15%

42%

11%

25%

38%

-56%-59%

-45%

-55%

-47%

-58%

-23%

-52%

-34%

-21%

IT Importance vs. Satisfaction

Importance (6-7) Satisfaction (6-7) Gap (Sat - Impt)

Base: Have System

57 59 60 49 36 55 43 27* 44 48


Agenda

Current State


How will Applications Change?

Wrap-up


IT Trends Excited About (Top 3)

Base: Total Sample (61)Q20. Please select up to three IT trends below that you are most excited about.Q21. Please list any other IT trends that you are excited about, if any, in addition to the ones mentioned above. OPEN-ENDED

Demand sensing

Sales and operations planning

Data visualization

Big data supply chains

eCommerce/social & mobile convergence

Mobility

Supply sensing

Social supply chains

Corporate social responsibility

Machine learning

69%

57%

36%

31%

23%

21%

15%

7%

5%

2%

Top 3 IT Trends Excited About

Other IT Trends Excited About

(open-ended)

CLOUD SOLUTIONS• Cloud based solutions that can link value chain

partners with different ERP systems.• Cloud computing (not just storage)

ANALYTICS• Predictive analytics• Predictive Analytics to address growing volatility• Business Intelligence - integrating massive

amounts of data into an actionable visual• Linear Program Models driving optimized plans

PROCESSES• It's not about systems. It's about basic

processes. Relying on systems to be the "solve" is wrong. I'm being forced to choose an IT trend--I'd like to choose "none." Otherwise, it's always about the shiny new toy

OTHER• Network optimization - maybe you would list in

supply sensing, not sure.


Big Data Plans & Expectations

Base: Preliminary Total Sample (21)Q7 - Does your company currently have an initiative in place to evaluate the opportunity with Big Data?Q6a - How soon do you expect to have a database that equals a Petabyte?

Yes29%

No43%

Not sure29%

Current Initiative to Evaluate Big Data


Definition

17

Challenges:• Transactional• Time phased data

Structured Data

• Social• Channel• Customer Service• Warranty

• Temperature• RFID• QR codes• GPS

• Mapping and GPS• Video• Voice• Digital Images

Unstructured Data

SensorData

NewDataTypes

Volume

Velocity

Variability


Big Data: What is it all About?

Downstream DataCold Chain

GeolocationRFID

Social

Ratings & Reviews

T-Log Data Twitter

Facebook

Call Center Logs

VideoPhotographs

Warranty Information

ReturnsWeblogs

eCommerce

EDI

Data Mining

Forecasting

Sentiment Analysis

What-if Models Hadoop

Rules-Based Ontology

Constraint-based Planning

Data VisualizationLearning Systems

R

Text Analytics

Scorecards

Sensors

Map Reduce

Digital Path To Purchase

Mobile Applications

Hallmark


Connecting the Extended Supply Chain

20

Trading Partner 1 Trading Partner 2 Trading Partner 3

Transactional Applications



Store


Connecting the Extended Supply Chain

Collaborative Layer

Collaborative Layer

Collaborative Layer

Enterprise Data Warehouse


Demand Signal Repository

Supply Signal Repository

Predictive Analytics

Key:

Transactional Adapters and Intelligent Rule Sets

Trading Partner 1 Trading Partner 2 Trading Partner 3





Store


Outside-In

Value-Based OutcomesDelivered by Value Networks

Supply Chain Excellence =

Supply Chain 2020 Tipping Points

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Talent Shortage

Compliance on Safe & Secure

Orchestration

Big Data Supply Chains

Internet of Things

Learning Supply Chains

Digital Manufacturing


Agenda

Current State


Case Studies

Wrap-up

Fresh Express Defined a NEW Market

9

CONVENIENCE,Ease of Serving

§ New Unique Formula§ New Technology§Distinctive Innovation§ Superior Process§ More Ingredients

YR 1 = $119.5YR 1 = $119.5(launch FEB/20/1995 QUAD)(launch FEB/20/1995 QUAD)

Latest YR09 = $1,201Latest YR09 = $1,201(52 Wks MAY/17/2009 FDMX(52 Wks MAY/17/2009 FDMX

FRESH EXPRESS ’ priority benefit focus was about the convenience of serving all that you had previously cut and chopped.

““ Experience FreshnessExperience Freshness””Dole Fresh

Follower

SHM PowerPoint Template Guidelines 03.15.10

Opportunity• 1/3 of shipped produce wasted: $34B in annual global waste from perishable

foods

• 50% is due to temperature variations from the farm to retail shelf

• Reducing temperature related shrink by half is approx. $9B opportunity.

1% reduction in Shrink

Increase in profit of $1,173,555

6% reduction in Shrink

Increase in profit of $7,378,830

Strawberries

Building Export Pallets – Group by First In or Shelf Life?

Having different remaining shelf life mixed on pallets, causes problems later. Sending short shelf life berries on longer delivery cycles turns Good Berries into BAD Berries for the retailer and others. More yellow & red pallets in Philadelphia & Southern California ~ More shrink at the retailer ~ Lower customer satisfaction

15+ 14+

13+

11+15+ 15+ 15+

10+

<10

12+12+

<1012+

15+

14+12+

11+14+

12+

12+

10+

<10

<1015+

15+

15+

15+

15+

15+

5+

15+

15+

15+15+

Unit Level Temperatures Matter

If we can group berries by shelf life, we avoid problems on multiple pallets – and send pallets to the right destination…


Campaign Objectives:

Reduce Out of Stocks at targeted retailers by

5%

Increase Shopper satisfaction and brand

loyalty

“Where’s My Bud” Viral Campaign

Concept:Execute a viral campaign

focused on leveraging shoppers to identify out of

stocks and potentially pricing compliance issues

Leverage a combination of consumer, internet, and in-store technical capabilities

Validation:Identify a key leader or market that wants to pilot. 50/50 shared risk in effort and resources to pursue. Keep costs to a minimum for pilot, under $75K


Retailer Experience

New text message to 612-961-7802:

A customer at Denny and Doug’s Liquor Emporium has just snapped a tag. You’re out of stock on Bud Light.

Please contact your wholesaler.


Here are some locations near you where you can find Bud Light. Be sure to use this promotion code to get your discount:

ABBL12456

http://www.budweiser.com/







More than Just “Like”

DellDell’s Key Social Media Milestones


p.32

Redefine Customer Service?


Social Coupons for Social Communities

p. 33

http://www.bobbysbest.com/Diapers-com-Coupons-Codes.html


Newell Rubbermaid

#Future15SB @bwdumars


#Future15SB @bwdumars

Newell Rubbermaid


How Best Buy created a social strategyBest Buy


37


• Today’s supply chains respond. They don’t sense. To be able to sense, the supply chain needs to be redefined by new data forms and applications.

• The pace of the next decade will be quicker. It will be outside-in and it will make many of today’s applications obsolete.

• Go Big DATA or GO HOME!

Summary


Big Data will be the NEW Foundation of the Future

Supply Chain


Who is Lora?

• Founder of Supply Chain Insights

• 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.


Where do you find Lora?

Contact Information: [email protected]

Blog: www.supplychainshaman.com (3500 pageviews/month)

Twitter: lcecere 2900 followers. Rated as the top rated supply chain social network user.

Linkedin: linkedin.com/pub/lora-cecere/0/196/573 (2300 in the network)

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