Big Data Analytics and the Supply Chain Opportunity

Supply Chain Insights LLC Copyright © 2016, p. 2
Disclaimer: I am a Skeptic

A Social Scientist

A Fortune-teller of Sorts….

I Write for the Supply Chain Leader

Descriptors Used by Leaders

Today’s Risks

Since 2000, 52 percent of the companies in the
Fortune 500 have either gone bankrupt, been
acquired, ceased to exist, or dropped out of the
Fortune 500.
Activist campaigns against companies with a market
cap greater than $10 billion has more than doubled
since 2010. Activists won, partially won or settled
73% of proxy fights in 2014, up from 55% in 2010.
Increasing Pressure on Operations

Productivity

Technology Evolution
ERP
SRM
APS
PLM
CRM
Operational Investments Workforce ProductivityAnalytics

Understanding the
Organization

Right Stuff?

Middle Management Has Greatest
Shortage of Supply Chain Talent

Growing Talent Gap

What We Expected

Functional Silos an Issue

Alignment Issues

The Supply Chain Effective Frontier

Orbit Charts:
Dow Chemical Company and DuPont

Automotive

Orbit Chart: Pharmaceutical
(Inventory Turns and Operating Margin)

Eli Lilly and Novo Nordisk

P&G and Kimberly-Clark

2006
2015
2006
2015
6
7
8
9
10
0.12 0.13 0.14 0.15 0.16 0.17 0.18 0.19 0.20 0.21
InventoryTurns
Operating Margin
Church & Dwight The Clorox Company
Best Scenario
CLX
0.17, 8.36
CHD
0.17, 6.93
Average (Operating Margin, Inventory Turns)
Source: Supply Chain Insights LLC, Corporate Annual Reports 2006-2015 from YCharts
Consumer Products
Clorox and Church & Dwight

• Lack of clarity on supply chain excellence
• Focus on functional excellence
• Isolated projects with a ROI rationalization
• Lack of supply chain design
• Not managing the metrics holistically across the organization
Why?

The Evolution of the Long Tail

Increase in Outsourcing

Bullwhip Effect

Gaps in Supply Chain Visibility

A Closer Look at Today’s Effectiveness

Build Horizontal Processes

Evolution of Horizontal Processes

Current State

Need for Network Ownership

Future State

Listening: Lenovo

0
0
0
0
0
0
0
Canada
-Customer A calls about a blue screen on a Yoga
-Customer B posts on Facebook about his X220’s AC/DC adapter issues
Large Enterprise Client experiences 5 keyboard malfunctions in their latest
shipment. Complaints received through account executive
[Critical Situation]
Brazil
-Customer F submits a service from on
esupport.lenovo.com regarding
their W530 hard drive
Morocco
-Customers G & H comment on their
X220’s electrical issues on Twitter.com
-Customer I called about Yoga screen
issues
Australia
-Customer J write a review on
NewEgg.com about AC/DC adapter
issues on X220
-Customer K had an eChat with Lenovo
about Yoga screen issues
China
-Customer L wrote on Weibo about
Yoga screen issues
-Customer M calls about a Tablet 8
battery issues
Voice of Customer Comes in Many Forms
USA
-Customers C & D write X220 product
reviews on amazon.com and mention
issues with AC/DC adapters
-Customer E posts on
forums.lenovo.com that they are
experiencing blue screens on their Yoga

0
0
0
0
0
0
0
Lenovo
- 6 recorded issues about X220’s
AC/DC adapter
- 5 recorded issues about
keyboard issues on X1 Carbon
- 5 recoded issues about Yoga
screen
- 1 recorded issue about W530
hard-drive
- 1 recorded issue about Tablet 8
battery
One Voice – A Single View of Perceptual Quality

• Supply chains that learn
as we sleep
• Network of networks
• Digital manufacturing
• Redefinition of Service
Supply Chains
• Interactive UI
• New business models
Looking Forward

Confluence of Technologies

Evolution of Analytics

Data Strategy for….
Clouds?
Streams?
Lakes?

Big Data Supply Chains are Evolving
48
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
Sensor
Data
New
Data
Types
Volume
Velocity
Variability

Analytics Maturity

Data Types

Supply Chains Don’t Play by the Rules
51
But,
what if
they
could?

Case Study: Internet of Things
Demand-Driven
Replenishment

2:00am Emergency
Drug Call

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.
Perishable Produce – A Closer Look
1% reduction in Shrink Increase in profit of $1,173,555
6% reduction in Shrink Increase in profit of $7,378,830
Case Study on Shelf life
Perishable Products: RFID Cold Chain Opportunity

Group by First In or Shelf Life?
15+ 14+
13+
11+
15+ 15+ 15+
10+
<10
12+
12+
<10
12+
15+
14+
12+
11+
14+
13+
12+
12+
10+
<10
<10
15+
15+
15+
15+
15+
15+
15+
15+
15+
15+15+
ALL GOOD BERRIES, BUT - they have different remaining
shelf life when received from growers
If we can group berries by shelf life, we avoid problems on multiple
pallets – and send pallets to the right destination…

Evolution of 3D Printing of Human
Organs

The Conundrum

Wrap-up
• Supply chains are five years
away from learning as we
sleep. Stabilize legacy
spending.
• We must learn from the past to
unlearn, and then rethink
supply chain processes. The
starting point is rewiring our
brains.
• Value network automation has
great promise: welcome the
Network of Networks.

About Lora Cecere
• Founder of Supply Chain Insights
• “LinkedIn Influencer”
• Guest blog for Forbes
• Author of 4 books: Bricks Matter (2012), Shaman’s Journal (2014),
Supply Chain Metrics That Matter (2014), Shaman’s Journal (2015)
• 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.
Contact Information:
• Email: lora.cecere@supplychaininsights.com
• Blog: www.supplychainshaman.com (15,000 pageviews/month)
• Forbes: www.forbes.com/sites/loracecere
• Twitter: twitter.com/lcecere (7,700 followers)
• LinkedIn: www.linkedin.com/in/loracecere (100,000 followers)
• LinkedIn Influencer: www.linkedin.com/today/author/446631

Big Data Analytics and the Supply Chain Opportunity

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