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July 2018
The Digital Supply Network –Operationalizing Digital
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Our objective for the next 45 minutes …
You will be able to articulate what a Digital Supply Network means to your leadership, peers, and teams1
You will have an understanding of the impact Digital Supply Networks will have on the Future of Work2
You will have an understanding of how to operationalize Digital Supply Networks using a Digital Foundry3
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Overview:
The evolution of Digital Supply Networks
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Boundaries are blurring
Producers &
consumersHumans &
machines
Large & small
organizations
Developed
& emerging
economies
External &
internal costs
& benefits
Products &
services
Paid work
& passions
Industries
& sectors
Scientific &
technical
domains
Holistic Decision Making
Resource Optimization
“Always-On” Agility
End-to-End Transparency
Connected Environment
Cybersecurity Data Integrity Talent Safety
DigitalDevelopment
SmartFactory
DynamicFulfillment
Synchronized Planning
Intelligent Supply
Connected Customer & Aftermarket
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The Future of Work
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Unprecedented change and opportunity
7Disruptors
Technology is everywhere
6.0 billion+smartphones in the world
by 20201
AI, Cognitive Computing, Robotics
$500,000 in 2008$22,000 today5
Tsunami of data
9x more in last 2 years2
Major enabler of machine learning
Jobs vulnerable to automation
35% UK 47% US
77% China6
Diversity and generational change
Millennials 50%3
25% global pop in Africa by 2050 5
Longevity Dividend– 50 year careers4
Explosion in contingent work
US Contingent workers 40% by 20207
Change in nature of a career
2.5 – 5 years: Half-life of skills4.5 years: Average tenure in a job8
1 https://www.cnbc.com/2017/01/17/6-billion-smartphones-will-be-in-circulation-in-2020-ihs-report.html
2 https://www-01.ibm.com/software/data/bigdata/what-is-big-data.html
3 Annual Global Millennial Study, https://www2.Deloitte.com/uk/en/pages/about-Deloitte-uk/articles/millennial-survey.html
4 https://www.newscientist.com/article/mg23130810-800-the-100year-life-how-should-we-fund-our-lengthening-lives/
5 https://www2.deloitte.com/content/dam/Deloitte/il/Documents/human-capital/Thriving_in_times_of_digita_disruption.pdf
6 http://www.oxfordmartin.ox.ac.uk/downloads/reports/Citi_GPS_Technology_Work_2.pdf
7 Intuit 2020 Report: Twenty Trends that will Shape the next Decade https://http-
download.intuit.com/http.intuit/CMO/intuit/futureofsmallbusiness/intuit_2020_report.pdf.
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What appears to be happening• Mobile, sensors, AI, cognitive computing, data.
• Access to technology by consumers globally.
• Technology infiltrates home and political life.
Time
Technology change
Rate
of
ch
an
ge
Business productivity
Gap in business
performance
potential
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What is really happening
1970s 1980s 2000s1990s Today2010s
Technology
Individuals
Businesses
Public policy
Source: Deloitte Human Capital Trends, 2017
Rate
of change
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Aspects of our point of view
THE AUGMENTED WORKFORCE
3 DIMENSIONS CHANGING
THE FUTURE OF WORK
A CONTINUUM OF TALENT OPTIONS
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The augmented workforceTechnology and new talent and organization arrangements are expanding and extending work…
Source: Deloitte Human Capital Trends, 2017
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Three dimensions changing the future of workThe “what” (automation), “who” (the open talent continuum), and “where” (workplaces, location) of work are dramatically changing
Current work options
1
Who can do the work?2
What work can be automated?1
Increasing automation, cognitive and AI technologies over the next 10 years…
Future work options
Where is the work done?3
Technological advancements enabling new models for interaction between companies, employees, and customers…
Physical Proximity3
Talent Category2
Automation Level
Rethinking combinations of talent, technology and workplace…
“Work” “Workplace”
“Workforce”
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A continuum of talent optionsNew talent approaches are being embraced by organizations to meet the needs of the business and increased expectations from workers
FULL / PART TIME EMPLOYEES
JOINT VENTURES
FREELANCERS
GIG WORKERS
CONTRACTORS
CROWDS
O R G A N I Z A T I O N - L E D
T R A D I T I O N A L O P E N
E M P L O Y E E - L E D
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Welcome to the Cognitive Era
1900s
Tabulating System Era
Mechanical devices helped us with tasks such as organizing data and making calculations for tasks such as evaluating the sales performances of a company’s employees (Hollerith Tabulating Machine).
1950s
Programmable Systems Era
Programmable systems enabled major accomplishments such as space exploration and the development of the Internet. The programmable systems era will continue indefinitely, and will underpin the era of computing that we are in now (Windows Desktops/ERP systems).
2000s
CognitiveEra
Cognitive capabilities augment and amplify human intelligence. It is critical to recognize and know when and how to automate and augment to achieve the cognitive advantage.
2020s
Amplified Intelligence Era
In the future, systems will be able to augment human intelligence and replicate human interactions.
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Analytics market trends and projections
TOP 3 EMERGING TECHNOLOGIES ORGANIZATIONS ARE INVESTING IN
In IT Spending in Big Data
by 2020
$232B
New “things” connected to
network infrastructure in 2016
5.5M A DAYOf CIO’s indicated that tech spend in analytics would increase over the next 2 years
76%
More unstructured data (vs. structured data) by 2020
~9x
More data created by IoT devices by 2019
269x
Robotic Process Automation
Cognitive Internet of Things
Organizations are looking for ways to leverage artificial intelligence, driving heavy investments in new technologies centered around cognitive capabilities
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Evolving Roles in the DSN
TIER 1
TIER 2
TIER 3
TIER 4ADOPTING THE TECHNOLOGY
EVOLVING BUSINESS MODELS FOR A CONNECTED & COGNITIVE SUPPLY CHAIN
How supply chain strategies will evolve in the future
SHAPING THE VALUE-ADDED WORKER
Effective human-machine teaming releases human workers to pursue new value-added tasks
ADAPTING THE ORGANIZATION TO THE TECHNOLOGY
The pace of new technology forces changes in how teams organize and communicate
Workforce learns to work with new connected and cognitive technologies
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Examples of New / Changing Supply Chain Roles
Digital Manufacturing Leader
• Integrate IT, OT / Engineering, Process, Maintenance, and
other functions to improve operational performance, e.g.,
redesign business processes and structure to optimize cross-
functional and digital capabilities
• Define and execute on digital strategy for manufacturing
• Lead and advocate for digital transformation in manufacturing,
including
– Creating and socializing the case for change and value
proposition for digital manufacturing across the
enterprise
– Partnering with Operations to drive adoption of new
tools and processes down to the shop floor
• Uncover opportunities to use technology to optimize
manufacturing capability and oversee planning and
implementation of solutions
Internet of Things (IoT)
Solution Manager
• Own the process and technology portfolio of IoT and asset
connectivity solutions in manufacturing, including
– Strategy, design, and implementation of IoT platform
architecture
– Technical design and development of applications
– Redesign of labor and machine processes to achieve
benefit realization
• Gather and prioritize functional and technical requirements for
application development
• Define hypotheses, conduct experiments, and analyze data to
determine innovation opportunities for implementation
• Align IoT solutions with enterprise and technology strategy to
meet wider business needs and goals
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The impact of automation will transform all areas of manufacturing and construction
Automation to increase productivity, reduce costs, and improve quality
Half of the industry jobs can potentially be automated
2.7 Million
Construction Workers can be replaced or displaced by 2057
88 Percent
Of operating engineers can be affected by automation
1.5 Million
New jobs will be created for construction workers
Exponential technologies are flipping the industry – more of capital and less labor intensive
Robotics: Extensively used in process like laying bricks. Performing at 6X efficiency level of manual labor.
Augmented/virtual reality and drones: Assist constructor to detect errors ahead of time, avoiding costly mistakes. Remote detection of jobsite condition to make site safe and secure.
3D printing: Capable of building multistory buildings and houses, much stronger and faster to build, with 40% material cost and 20% labor cost.
Over next 40 years, overall mfg. employment likely to decrease
However, automation is likely to lead to:
Lower building and maintenance cost
Higher per-worker productivity
Reduced rates of human injuries and fatalities
Increased business profit
Note: Midwest Economic Policy Institute (MEPI) Research
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Future Workforce in Manufacturing and Construction
In 10 years,
20% of assembler jobs in
manufacturing will be lost
Construction Jobs will Boom
+865K jobs by 2026
Assemblers
& Inspectors
Laborers &
Tradespeople
Biggest STEM jobs in
2026:
• Mathematicians
• Statisticians
• Industrial Engineers
• Software developers
Low-skilled
manufacturing jobs
declining the most:
• Laborers
• Material movers
• Hoist/winch operator
• Crane/tower operator
• Maintenance & repair
New Job Titles
Digital Thread Engineer
AR Journey Manager
Drone Manager
Building Assembly Technician
Human-machine Teaming Manager
DSN Community Manager
Collaborative Robotics Technician
Source: Deloitte MI Skills Gap Research
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Conduct exponential technology pilots with inputs from workforce redesign
Cognitive Engagement
Cognitive Insights
Robotics & Cognitive Automation
What the advantage looks like
Enable machines to replicate human actions and judgment with robotics and cognitive technologies
Identify opportunities for growth, diversification, and efficiencies by creating large-scale organizational intelligence with pattern detection and the ability to analyze multiple data sources
Use intelligent agents and avatars to deliver mass personalization at scale and smarter, more relevant insights to amplify end-user experience
Transformative changeAutomate repeatable tasks to improve efficiency
FlexibilityUnchain profits from scale constraints to increase enterprise flexibility
New competenciesEngage existing talent to focus on higher-value tasks
New growthUncover hidden patterns to identify new opportunities for innovation
Evidence-based decisionApply a science-based decision-making process informed by deeper insights
Timely actionPush real-time, contextual insights to decision makers at relevant moments
Optimized behavior patternsDrive desired behaviors by delivering hyper-personalization at scale
Next-gen experienceDeploy personalized digital assistants to interact with end-users
Ubiquitous engagementGenerate personalized and contextual recommendations to end-users
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Digital Foundry
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The Digital Foundry
The goal of the Digital Foundry is to create joint ownership with enhanced decision making, inject energy into converting ideas to actionable plans, increase efficiency, and deliver measurable value
Process Outcomes
Ideation SourcesPrioritized List of Projects
Business Value
Metrics / Accountability
Project Costs
Implementation Roadmap
Project Charter
Ideate
Human CenteredDesi gn
Agi l eDel i ve ry
Measu r e Va l ue
Evolv e
Digital
Foundry
Engineering & Technology Groups
Business Units
Employees
Deloitte’s CoEs
Market Scans
Ecosystem Partners
University Alliances
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Key Elements to Developing and Maintaining the Digital Foundry
SET A MISSION AND
STRATEGYMANAGE THE PORTFOLIO
DESIGN AND SCALE
INNOVATIONS
FUEL AND SUPPORT
INNOVATION
Intent
Clear priorities and ambitions for digital innovation
Themes
Articulated areas of focus to pursue
Sensing and Scanning
Ability to spot trends, opportunities, and potential pain points
Governance
How and by whom decisions are made to initiate, extend, or terminate initiatives
Funding
Financial resources devoted to innovation and allocation mechanisms
Metrics
Targets and indications to guide innovation decisions and measure value
Sponsorship
Methods to frame problems, pick sponsors, charter and champion initiatives
Process
Clear methods and approaches for developing digital innovations
Incentives
Mechanisms to reward members and areas in the organization for innovating
Talent + Network
Attracting, developing, and deploying individuals with the right skills at the right time
Tools + Infrastructure
Physical and digital systems that support innovation
CREATE
DIGITAL FOUNDRY DEVELOPMENT
SCALE
Ownership
Joint decision making and innovation enable ownership of ideas and concepts
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Executing the Digital Foundry
FROM OPPORTUNITIES TO PROTOTYPES FROM PROTOTYPES TO SCALABLE PROGRAMS
4. Pilot Ideas
3. Prototype
IdeasIterative/agile process
Launch & Scale Programs
1. Identify Ideas
2. ScreenIdeas
(Sprint 0)
DIRECTIVE
EMERGENT
(Industry trends, Quests)
OTHER SOURCES
(Signals, IT, Business, Market Scans, CoEs,
etc.)
Identify trends
with breakthrough
potential
Governance update,
Identify
opportunities and
filter viable ideas
STRATEGY: BALANCE OF
ISSUES-TO-IMPACT
BUILD BUSINESS CASE
Core, Adjacent, New
Sustaining vs Disruptive
Difficulty of implementation
MEASURE ORG IMPACT:
Create optimal
prototype
Conduct testing of
prototype
COLLECT AND CLEAN DATA
AS NECESSARY
DEFINE FUNCTIONALITIES
REVIEW WITH THE
BROADER TEAM
BUILD WORKING
PROTOTYPE AND POC
CHOOSE STRATEGIC
PARTNERS
BUILD IMPLEMENTATION
PLAN
BUILD TRAINING
INFRASTRUCTURE
TROUBLESHOOT BUGS
Only the viable
ideas will make it
to the foundry
DEFINE
ORGANIZATIONAL
STRUCTURE
DEFINE
KPIS AND
METRICS
Governance
(Monthly)
Sprints
(6-8 weeks per idea)
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Governing the Digital Foundry
Digital Foundry Core Team
Create and select future sprints
Manage, track, and report on key sprints
Develop clear processes to accelerate future work
Subject Matter Specialists
Validate commercial assumptions
Provide perspective and relevant data from functional areas
Provide transformation and change management experience
Digital Foundry Leadership
Sponsor the Digital Foundry
Set the strategic direction
Obtain funding for the initiatives
Create joint ownership of innovation
Foundry Leadership
The leadership team that will drive the
direction of the digital initiatives
Define the strategic direction and obtain
funding
Receive report outs and determine to
continue, terminate, or adjust initiatives
Digital Portfolio
Run and manage digital sprints
across different themes
Funding
Identify, evaluate and select
initiatives to receive funding as
part of the Digital Foundry
Metrics
Define and evaluate the value the
initiatives are creating
DIGITAL FOUNDRY TEAMDIGITAL FOUNDRY OPERATING MODEL
Domain Experience
Bring Data Experience, Exponential Technology Knowledge, event-
centered Design Experience, and Supply Chain Functional
Experience into the team as needed
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Creating Environment to accelerate and succeed
Join an immersive experience (e.g., tour an IoT lab) to explore the “art of the possible”, incite ideas, and cultivate a
culture of innovation
Immerse Yourself in Innovation
Use an agile, iterative approach to move from strategy to prototyping as quickly as
possible – “fail fast” and achieve rapid results
Prove it Works (Quickly)
Evolve internal and external partners into “value webs” through collaboration in new
technologies and capabilities.
Build an Ecosystem
THINK BIG
Disconnect from the core business and set up a “black ops” team to enable disruption
within an established organization
Scaling the Edges
START SMALL SCALE FAST
ESTABLISH A DIGITAL FOUNDRY
The Digital Foundry is an aggregation of services that blends strategic expertise, governance, agile delivery methods, and innovative thinking with enabling technologies.
Select pilots that will allow the idea to demonstrate value quickly and then scale
the proven results
Selection of Pilots
Champion your successes to gain traction and achieve enterprise-wide adoption
Market Your Own Success
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Conclusions
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Next steps
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Thank you
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