Transparency in Supply Chains

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Transparency in Supply Chains

Rob Allan

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Benefits of transparency

IBM’s road to transparency

How to achieve transparency

IBM Confidential

2 Why is transparency so difficult

What is transparency

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What is transparency

Concept of supply chain transparency began in 1904

• Upton Sinclair spent two months uncovering details about the

meat-packing industry, which he portrayed in the classic book The Jungle

• Food and Drug Act and Meat Inspection Act set stage for early

transparency

• More than a century later; multi national, complex supply chains face

massive risks associated with transparency: supplier labor practices,

corruption, environmental, quality, etc

• California Transparency in Supply Chains Act of 2010

Definition of transparency: driving visibility of information across the

extended supply chain for the purposes of improved efficiency and

compliance

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Importance of Supply Chain Visibility

The collective insights from 400 Supply Chain Executives identified

five major challenges and

Visibility was No.1 – IBM CSCO Survey

Based on responses of “to a very great extent” and “to a significant extent”

IBM Confidential

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Importance of Supply Chain Visibility

COST CONTAINMENT SUPPLY CHAIN

VISIBILITY

RISK MANAGEMENT INCREASING CUSTOMER GLOBALIZATION

DEMANDS

55%

70%*

60%

_56%

_43%

Supply chain visibility is inhibited by a lack of

capabilities and an unwillingness to collaborate.

Customers are continuing to demand more: right product, right place, right time, right price,

sooner. Process, data and technology are

identified as the roadblocks to good risk management, yet they

are the key enablers.

Lead times, delivery and quality are top challenges – however,

globalization has been a benefit for the leaders. Fighting integral costs as

such might be futile, but being flexible can create cost savings elsewhere.

Visibility is the keystone of Smarter Supply Chain, driving analytics & collaboration, and

enabling resolution of major challenges facing today’s supply chains

Collaboration &

Analytics

(intelligent)

Orchestration

(instrumented)



Execute seamlessly across internal supply chain processes



Share information to optimize joint responses to changing conditions

* Percentage of Supply Chain Leaders who report this challenge impacts their supply

Visibility

(interconnected)



Analyze and predict the trends and risks that impact your supply chain



Determine the optimal response to changing conditions



Expose supply chain information from multiple disparate systems



Identify and respond to the events that impact your operations or your trading

partners

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Companies need to manage constantly changing conditions &

visibility across fragmented and multi-partner enterprises will help

6 Lack of visibility into supplier

inventory leads to stock outs,

late/expedited shipments, quality

issues, etc.

Inability to receive timely, accurate

demand signals leads to stock outs,

excess/obsolete inventory, higher

cost, lost revenue, and poor

customer satisfaction.

Lack of timely information on

forecast, supply, or customer orders

results in additional costs such as

premium routing or redistribution

Lack of visibility and timely

information lengthens the

cash-to-cash cycle, reducing profitability

Source: Line56 2003

Sales & Operations

Planning Process

Lack of visibility into changing

supplier commits can lead to

inaccurate customer

commitments or financial

projections

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Features of a Transparent Supply Chain

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Benefits of transparency

IBM’s road to transparency

How to achieve transparency

IBM Confidential

8 Why is transparency so difficult

What is transparency

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Why is Transparency so difficult

Cultural Hurdles

• Organizational silos are not comfortable sharing information

• Providing real time visibility across supply chain will affect a corporate

management system

Data

• Rare to find a business with enterprise applications that include data

structures to support transparency

• Assessing >50 companies to examine potential for implementation,

significant data effort necessary to enable a transparency initiative

Less control over external parties

• Suppliers

• resellers

Business Case

• Subtle benefits and longer lead times counter to attractive business

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Transparency among all stakeholders will require change [shift]

in cultural paradigm and renewed team work

10  Together we will have to develop the

willingness to share data that will

enable the use of information as a

collaboration tool and not a power tool

 We will have to undergo a culture shift

to stop spending time to manipulate

data before consumption of others

 We will have to unite and work as ONE

team as TSC will necessitate working

across traditional process boundaries

 If you believe in TSC, you will have to

believe in this culture [shift]

 We will need support from our senior

leadership team to cascade this

message through your entire teams to

increase the speed of TSC

implementation

IBM Confidential

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Benefits of transparency

IBM’s road to transparency

How to achieve transparency

Why is transparency so difficult

What is transparency

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IBM Confidential

12 How to achieve transparency

Lay a foundation for success

• Metric alignment

• Data integrity

• Understand the predictive and responsive objectives of transparency

Organizational Change Management

• Secure stakeholders and define objectives

• Alignment on project mission and requirements

Select a platform and tool that aligns with objectives

• Enterprise wide solutions

• Point solutions

• Supply side and demand side

Implementation

• Start small and build on lessons learned from initial deployments

• Focus on high profile business issues

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Benefits of transparency

IBM’s road to transparency

How to achieve transparency

IBM Confidential

14 Why is transparency so difficult

What is transparency

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While challenging to quantify, improved transparency will yield

benefits across the entire supply chain

Real time order

status visibility and

exception alerts

 Credibility and reliable

information

 Increased customer

satisfaction levels as they

have better access to order

status

Improved visibility

– finished goods

inventory

 Better service level

commitments

 Order status notifications

Transparent

operations

management

 Issues / risks identification

 Assess impact to supply

chain

 Next best action initiation

 Alert / exception driven

 Single version of truth

Geo spatial & other

visualizations

Global Level KPIs

with drill downs

Mobile App for alerts

Suppliers

Effective supplier

collaboration

 Reduced inventory levels

and operations cost

 Improved sharing

information and

collaboration

Clients

Business

Partners

IBM

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IBM Confidential

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Benefits of transparency

IBM’s road to transparency

How to achieve transparency

Why is transparency so difficult

What is transparency

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© 2014 IBM Corporation

IBM is undergoing an analytics-led, technology-enabled supply chain

transformation

Globally Integrated

Enterprise

Smarter Supply Chain



Enterprise efficiencies



Streamlined Global

processes



Information sharing



Advanced Analytics,

Optimization, Big Data Mgt



Supply Chain Visibility



Multi-enterprise supply chain

transformation

Evolving Supply Chain Management from cost center to value center…

New Era Supply Chain

Reinvention



Watson-enabled cognitive

analytics



Supply Chain Transparency



Data Driven /Digitally

Executed



Cloud, Mobile, Social

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

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Intelligent Operations & Resolution Center

• Leverage Systems of Record,

unstructured data, and automate

manual processes.

• Manage exceptions from the Supply

Chain. Order churn, forecast

inaccuracy, supplier shortage, as

well as prioritize capacity and

available supply

• Get the right information to the

right people at the right time.

Enable optimized decision making.

Get data

from manufacturing,

procurement, fulfillment,

logistics, operational

management systems

Visualize, analyze

Key Performance Indicators,

statistics to see the trends,

report on different performance

metrics

Automate, notify

automated alerts, facilitates

intra- and inter-company

business process and data

collaboration

TSC is the system of engagement initiative that will leverage data,

apply automation & analytics and drive business insights

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IBM’s vision is to provide visibility across existing applications

and data sources to create a predictive and smarter supply chain

Global Level SC IOC*

Brand & Site Level SC IOC*

QEWS

CPMT

IBM Buy Analysis Tool (iBAT)

Detect Analyze Decide Act

Global Control

Tower

Brand Control

Tower

Site Control

Tower

Supplier Window Business Partner Window Client Window

Client Window (OSOL)

* Intelligent SC Operation Center

IBM Confidential

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New SC Transparency

FROM

To

Manually query data

from multiple sources and

consolidate information

Access information through

single framework receiving

Need-to-know (alerts) &

Want-to-know (drill down)

Spend time on data gathering

and data preparation

Focus on working

issues & opportunities

Measure results

after the fact

Predict and act

to optimize client experience

Pre-selected & filtered information

_{One version of the truth}

Communicate with

colleagues, suppliers &

partners in predefined

schedules

Collaborate continuously and in

real time across business

units, with suppliers and

partners

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TSC will provide a feature-rich operations center to enable

visibility & collaboration among all major stakeholders

Key Benefits



End to end data visualization,

streamlined operations, workflow

with automated alerts will help with

higher response speeds and

reduce overall risk



Creation of a cross brand smarter

value chain with predictive and

prescriptive business intelligence



Tracking & prediction of order

progression will improve quality

and client satisfaction levels



ROI between 3X to 5X

Intelligent Operations Center

Global Consolidated View Brand/BU

Site

Partner/Clie nt

 Visibility into real

time order status

will build credibility

and drive higher

client satisfaction

 Alert-driven model

will provide clients

key order

information to

manage their

critical operations

 Frequently updated

and accurate

demand forecast

 Effective

collaboration and

SC management

 Lower cost of

operations

 Ability to provide

better service levels

to IBM and clients

 Improved order

forecast and sales

visibility to

effectively manage

finished goods

inventory

 Consolidated

information framework

– one version of the

truth, actionable alerts,

drill-down capability

 Initiates recovery

either automatically

(self-healing, resilient

SC) or through next

best action and

decision feedback

IBM Confidential

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Demand

Prediction

Supply Chain Visibility

for informed Clients,

Partners, & Suppliers

SC Risk

Alerts

Plug & Play

Transparency

Framework

Supply Chain Big

Data in the Cloud

Business Rules &

Intelligence to direct

people to critical

Information

Analytics &

Automation

T-shaped

Supply Chain

skills

Clear to Build

Prediction

Alerts sent onto

mobile devices

Real Time Order Information

Transparent Supply Chain

Crit Sit Alerts

Demand Mgmt

Demand Shaping

Online Order

Progression

Control

New Roles in an E2E

Deep

Analytics skills

Quality

Alerts

Hub Health

Analysis

Partner

Collaboration

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ISC supply network: 2020 future vision

Transparent

Supply Chain

Social

& Mobile

Advanced

Analytics

Predictive Risk

Management

collaborative, end-to-end, intelligence focused on client value and cash conversion

IBM Confidential

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