Supply Chain Transformation - From First to the Last Mile
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The document discusses supply chain transformation, highlighting trends, demands, and elements essential for modern supply chains. Key topics include omni-channel retail, inventory management, demand planning, and the utilization of technology like robotics and IoT for efficiency. A roadmap for transitioning from traditional to modern supply chain practices is also outlined.
Supply Chain Transformation - From First to the Last Mile
- 1. Supply Chain Transformation From First to the Last Mile Kris Gorrepati Solution Management, Extended Supply Chain, SAP
- 2. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 2 Agenda Source: The Henry Ford • Supply Chain Trends • Elements of Supply Chain Transformation • Roadmap for Supply Chain Transformation • Q&A
- 3. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 3 Supply Chain (A Century Ago) 16 Coal mines controlled by Ford Motor Company 700,000 Acres of timberland 28 Hours for the iron ore to turn into finished automobile 33 Countries in which Ford operated. From Brazilian forests to Northern Michigan mines Source: The Henry Ford
- 4. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 4 Supply Chain Today - By the Numbers 1 Billion Possible Configurations 34.4 Million Items ordered on Prime Day in 2015 630 Million Estimated packages delivered by UPS during holiday season in 2015 2 Weeks From an idea to store shelf 500,000 Miles Supply chain journey of an iPhone 2 Hours Order-to-delivery time for groceries
- 5. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 5 Scope of Supply Chain From First to the Last Mile Retail location Distribution Center Factory Supplier Supplier’s Supplier Customers
- 6. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 6 Trends Driving Supply Chains Today Omni-channel E-commerce Right level of vertical and horizontal integration Right combination of global and local supply chain
- 7. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 7 Demands on Supply Chain Agile Responsive Resilient Personalize d Cost-effective
- 8. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 8 The Demands on Supply Chain Can Make or Break an Organization E-commerce generates a lower operating profit for us than four-wall brick-and-mortar. When the consumer requires free delivery, free return, wonderful packaging, plus there's a new trend that people are buying multiple sizes of things to try them out at home and then return them, that all is a negative headwind for us. - John Idol, CEO of Michael Kors Only 19 percent of the top 250 retailers(and only 16 percent of all respondents) say they can fulfill omni-channel demand profitability - The Omni-channel Fulfillment Imperative
- 9. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 9 Elements of Supply Chain Transformation Social networks Connected Retail Last mile delivery Warehouse Automation Autonomous Driving Supply Chain CollaborationRobotics Internet of Things (IoT) Internet Search Smart Products Demand Sensing Factory Automation Collaboration Agile Planning Scheduling and optimization
- 10. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 10 Demand Planning is Getting More Granular Category, Product, Geography, Customer Segment Demand Factors • Simultaneous external demand from multiple customers • Seasonal, time-varying demand • Intermittent demand • Promotions, Outliers • Over- and under- forecasting • Consideration of recent process changes Location Attribute(s) Brand Category Channel Region Company
- 11. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 11 More Sources of Data
- 12. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 12 Demand Forecasts have Large Impacts on Deep Supply Chains
- 13. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 13 Responsive and Intelligent Order Fulfillment Agile Responsive Resilient Personalize d Cost-effective
- 14. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 14 Inventory Management Real world is Stochastic Made of multi-stage networks Dynamic Integrated Requires appropriate inventory positioning and agility
- 15. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 15 Warehouse Management and Operations Warehouses are often under utilized or overflowing Source: Flexe • Automation • Robotics • Internet of Things • On-demand Warehousing • Retail outlet as mini-warehouse
- 16. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 16 Retail Locations in Omni-channel • Buy online and pick up in store • Returns processing for online purchases • Shipment from store for local deliveries • Try before you buy Source: Hointer
- 17. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 17 Transportation Management • Between 15-25% of the trucks on US roads are empty • Non-empty trailers - 36% under utilization • Shortage of drivers Source: IPIC 2016 • Pooling • Collaborative storage and distribution • On-demand logistics integration • Dynamic scheduling and optimization
- 18. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 18 Last Mile Delivery • Same-day delivery • On-demand logistics integration • Local commerce
- 19. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 19 Supply Chain to Shop Floor Synchronization Production Leveling, Sequencing, Customization Courtesy Assembly Mag • Heijunka, JIT systems require supply chain to be in sync with factory systems • Increasing proportion of custom orders
- 20. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 20 Supply Chain Visibility • Full to segmented supply chain visibility • Upstream and downstream supply chain visibility • Intelligently handle unexpected events Jabil Supply Chain Control Tower Tesco’s tag reading robot
- 21. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 21 Supply Chain Collaboration • Supply chain collaboration through the whole lifecycle • Early information sharing • Collaborative issue resolution
- 22. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 22 Supply Chain Management is Driving Digital Transformation Many digital transformation initiatives are related to supply chain management • Omni-channel • Connected retail • Real-time supply chain planning • Data science • Robotics • Internet of Things (IoT) • Mobile • Autonomous driving • ….
- 23. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 23 How and Where to Get Started Single Channel Multiple Channels Omni-channel Unified inventory Omni-channel order management Inventory optimization Last mile logistics 360 customer view Warehouse strategy Connected retail / Buy online pick up at store Channel specific order fulfillment Inventory optimization Logistics design and optimization Multi-channel CRM Responsive order fulfillment Inventory optimization Logistics optimization
- 24. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 24 Finally Ask, what would do
- 25. © 2015 SAP SE or an SAP affiliate company. All rights reserved. 25 Contact Info Kris Gorrepati [email protected]
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