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

Bill Kohnen July 2014

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

Bill Kohnen July 2014

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.