Finding Opportunity in Complexity
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The document discusses the evolving challenges and opportunities in the global supply chain ecosystem, emphasizing the importance of adaptability and technology in navigating consumer demands and market complexities. It highlights that companies that optimize their supply chains can achieve greater profitability, and outlines the significance of sustainability and compliance in today’s business environment. Examples of successful companies illustrate best practices in managing supply chain disruptions and meeting consumer expectations for personalization and transparency.
Finding Opportunity in Complexity
- 1. Thriving in a Changing EcosystemFinding Opportunity in Complexity
- 2. Source: Aberdeen Group, February 2011Our Rapidly Evolving EcosystemGlobal, Volatile, Unpredictable
- 3. And CEO’s Expect it to Get Tougher…Source: 2010 IBM Global CEO StudySource: Aberdeen Group, February 2011Our Rapidly Evolving EcosystemGlobal, Volatile, Unpredictable
- 4. Where There is Chaos…Opportunity
- 5. Caldwell’s28%of 2011 US holiday sales will include Smartphones in the shopping journeySource: Logistics ViewpointsSource: IDC Retail InsightsConsumers Expect Mobile Options Unprecedented Opportunities for those that Can Adapt Quickly to Changing Shopping Patterns
- 6. Case in Point:J&R Music recently introduced a mobile app to support shopping on the go and enhance the store experience…Caldwell’sTechnology EnablerAll-Channel Platform 320,000 Items
- 8. Video Demos
- 9. Deal of the Day
- 10. Store Locator
- 11. Order HistorySource: Logistics ViewpointsSource: IDC Retail InsightsConsumers Expect Mobile Options Unprecedented Opportunities for those that Can Adapt Quickly to Changing Shopping Patterns
- 12. the top ten Facebook brands added115 MILLION FANSSource: Logistics Viewpointsin 2010Source: IDC Retail InsightsConsumers Expect Social Options Unprecedented Opportunities for those that Can Adapt Quickly to Changing Shopping Patterns
- 13. Case in Point:Late last year, Proctor & Gamble began selling Pampers directly through Facebook…Technology EnablerAll-Channel Platform31,913 fans/month1,000 orders/daythe top ten Facebook brands added115 MILLION FANS…and the results were impressiveSource: Logistics Viewpointsin 2010Source: IDC Retail InsightsConsumers Expect Social Options Unprecedented Opportunities for those that Can Adapt Quickly to Changing Shopping Patterns
- 14. “I’ll have a medium triple-shot, half-caff, no whip mocha… extra hot.”Consumers Expect PersonalizationFrom Coffee to Tennis Shoes, Everyone Wants to Express their Own Sense of Style
- 15. “I’ll have a medium triple-shot, half-caff, no whip mocha… extra hot.”Technology Enablers Configurable Workflows
- 16. Collaboration Consumers Expect PersonalizationFrom Coffee to Tennis Shoes, Everyone Wants to Express their Own Sense of Style
- 17. Relentless GlobalizationTechnology EnablerAll-Channel Platform70M Peoplecross the threshold to the middle class each year,and virtually all are in emerging economiesSource: Goldman SachsMore Countries, More Complexity…More Customers
- 18. Consumer Responsiveness: 1958Lag Time for Significant Changes in Store Demand to Cascade Across the Extended Supply Chain?6 Months8-10%Typical Out of Stocks at the Retail Shelf?Source: Logistics ViewpointsThe Need for Speed -- and AccuracyWhile Velocity has Improved, Unprecedented Opportunities Exist for those that Can Anticipate Demand Accurately
- 19. Consumer Responsiveness: TodayLag Time for Significant Changes in Store Demand to Cascade Across the Extended Supply Chain?3-6 WeeksTechnology Enablers Collaborative Forecasts
- 20. CPFRSource: Logistics ViewpointsTypical Out of Stocks at the Retail Shelf?The Need for Speed -- and AccuracyStill 8-10%While Velocity has Improved, Unprecedented Opportunities Exist for those that Can Anticipate Demand Accurately
- 21. More and More Links in the ChainAnd still only7%of manufacturers diligently optimizetheir global supply chain networksTechnology Enablers Visibility/Collaboration
- 22. Data Integration PortalsManufacturers who diligently optimize their global supply networks are73%more profitable than their peersSource: DeloitteManufacturers, Suppliers, Transporters, Wholesalers, Retailers, Consumers, Lenders…
- 23. Supply Chain “Masters”Manage 75%of their Supply Base througha Formal ProcessSource: AccentureA Proliferation of Partners and OutsourcersMore Complexity, and (Possibly) More Stability through Better Processes
- 24. 84%Employ a Supply-BaseSegmentation Approach83%Automate Tracking/Reporting of Supplier Performance80%Centrally Log and ProactivelyManage Supplier ContractsSource: AccentureA Proliferation of Partners and OutsourcersMore Complexity, and (Possibly) More Stability through Better Processes
- 25. Technology Enablers Supplier Performance
- 26. ScorecardsA Proliferation of Partners and OutsourcersMore Complexity, and (Possibly) More Stability through Better Processes
- 27. Supply Chain Shocks: Mother NatureHighlighting the Importance of Planning for the Unplanned“The damage to production facilities and on export goods themselves will likely continue for the next several months.”
- 28. Supply Chain Shocks: Mother NatureHighlighting the Importance of Planning for the Unplanned“Due to power supply constraints expected in the summer, a full pickup in exports is unlikely until at least the end of this year”Technology Enablers Contingency Planning
- 29. Configurable WorkflowAfter the political unrest in Egypt, cotton prices were171%higher than the year priorSource: Wall Street JournalSupply Chain Shocks: Geo-Political TurmoilStriking a Balance between Global Integration and Local Relevance Leads to Agility
- 30. CEO’s of Companies with “Operational Dexterity” are23%more intent on achieving an optimal balance between global and local marketsSource: IBM CEO Study 2010Supply Chain Shocks: Geo-Political TurmoilStriking a Balance between Global Integration and Local Relevance Leads to Agility
- 31. 5,678,000The 124M product recalls in 2010 included…pounds of beefSupply Chain Shocks: Product RecallsConsumer Product Safety Improvement Act (2008), Food Safety Modernization Act (2011) Indicate Compliance and Recovery Plans are Now Table Stakes
- 32. 93%of consumers believe that recalls indicate whether companies care more about their own profits than they do about customer safetySource: Princeton UniversitySupply Chain Shocks: Product RecallsConsumer Product Safety Improvement Act (2008), Food Safety Modernization Act (2011) Indicate Compliance and Recovery Plans are Now Table Stakes
- 33. 87%of consumers are more likely to purchase products from companies that manage recalls in an “honest and responsible” wayTechnology Enablers Supplier Segmentation
- 34. Track and RecoverSource: Princeton UniversitySupply Chain Shocks: Product RecallsConsumer Product Safety Improvement Act (2008), Food Safety Modernization Act (2011) Indicate Compliance and Recovery Plans are Now Table Stakes
- 35. The Mandate for Sustainability93%25%of CEO’s View Sustainabilityas Critical to Successof Consumers WouldSwitch Brands Givenan Ethical AlternativeSource: AccentureSource: IBM Institute for Business ValueFuture Guardianship, Risk Mitigation, Competitive Opportunity
- 36. The Mandate for SustainabilityHowever…32%Conserving to Reduce Needfor Natural ResourcesTechnology EnablerGreen Dashboards30%Innovating to Shift Needfor Natural Resources30%Are Doing NothingSource: McKinsey QuarterlyFuture Guardianship, Risk Mitigation, Competitive Opportunity
- 37. Collaboration, Workforce Management, Workflow, All-Channel CommerceLogistics Technologies Are Critical to Thriving in Today’s Ecosystem
- 38. Real-World Example: Integrating a Highly Complex Supply Chain – from Farm to Table…WORLD’S LARGEST MEAT PRODUCERLARGEST US THIRD-PARTY COLD STORAGESECOND-LARGEST U.S. WHOLESALE GROCER 140 Facilities
- 39. 5,000 Trucks
- 40. 182 Warehouses
- 41. 1.1B Cubic FT
- 42. 2,500 Outlets
- 43. 24 StatesReal-World Example: Integrating a Highly Complex Supply Chain – from Farm to Table…WORLD’S LARGEST MEAT PRODUCERLARGEST US THIRD-PARTY COLD STORAGESECOND-LARGEST U.S. WHOLESALE GROCER COLLABORATION & CONTROLRaw material trackingFinished goods trackingLot and batch controlFresh Item ManagementInventory accuracyWorkforce ManagementWorkforce Management3PL Billing
- 44. Real-World Example: Minimizing Disruption in the High-Stakes World of High-Tech…WORLD’S SECOND-LARGEST CONTRACT MANUFACTURERWORLD’S LARGEST THIRD-PARTY LOGISTICS PROVIDERWORLD’S LARGEST ELECTRONICS RETAILER 48M SQ FT
- 45. 30 Countries
- 46. 500 Sites
- 47. 15 Countries
- 48. 1,000 Stores
- 49. 10 Retail BrandsReal-World Example: Minimizing Disruption in the High-Stakes World of High-Tech…WORLD’S SECOND-LARGEST CONTRACT MANUFACTURERWORLD’S LARGEST THIRD-PARTY LOGISTICS PROVIDERWORLD’S LARGEST ELECTRONICS RETAILERVISIBILITY & COLLABORATIONComponent leveltrackingSerializationStore ExecutionValue added servicesBill of materialTransportationManagementOrder accuracyInventory accuracyWorkforce ManagementWorkforce Management3PL Billing
- 50. Greatest Positive Impact on Profits Next 5 Years?51%64%Growth of Consumersin Emerging EconomiesShift of EconomicActivity Between Regions63%50%Technologies that EmpowerConsumers & CommunitiesIncreasingly GlobalMarkets for Labor/Talent32%52%Consumer Demand for Corporate ResponsibilityIncreased Labor Productivityin Developing MarketsSource: McKinsey Quarterly, January 2011Where There is Chaos…Opportunity
- 51. RedPrairie At-a-GlanceLargest supply chain and retail optimization company in the worldFacilitating the flow of trillions of dollars of goods through the world’s most expansive supply chains60,000 client sites/50 countriesWarehouse Management, Workforce, Inventory, Transportation, Logistics and e-Commerce solutions
- 52. Thank YouMichael MayorasCEO, RedPrairie
Editor's Notes
- #22: KEY TALKING POINTS-Recent events in the Middle East have also highlighted the need for flexible, agile supply chains that give us options when geopolitical turmoil interrupts the flow of goods -Egypt was one of the first countries this year to experience political unrest that eventually led to dramatic change in the government-Earlier widespread concerns were centered around the Suez Canal and the flow of oil out of the Middle East, but anyone in the apparel industry also had to keep a watchful eye on the flow of Egyptian cotton, as many brands/retailers depend on Egyptian cotton for high-end garments and textiles -Shortly after the crisis unfolded, cotton futures rose to prices 171% higher than one year prior -As most analysts don’t expect consumers to pay double for items made from cotton, will this signify a fundamental shift in the market, and if so, who will be there to take advantage of the shift?THE OPPORTUNITY-How do we find opportunity in a world where unrest appears to be a permanent part of the geopolitical landscape?-We must strive for agility and flexibility and look to balance our network between local and global resources -We must constantly monitor and evaluate geopolitical situations in geographies that are part of our ecosystem -We must develop networks and plans that build in contingency plans and potentially even safety stocks for mission critical components -We must strive for a manageable balance of global and local operations that manage both costs and risks-In short, we must strive for operational dexterity. Because that is where we can find competitive advantage and opportunity-The best-run supply chains already recognize the importance of finding the right balance -A recent CEO Survey found that companies that were found to have “operational dexterity” have a commitment to striking the right balance, and manage that balance as a daily part of their operations****ADD SECOND RESULT/PAYBACK DATA POINT FROM CEO STUDYBACKGROUNDhttp://public.dhe.ibm.com/common/ssi/ecm/en/gbe03297usen/GBE03297USEN.PDFGeo-Political Turmoil is another reality in today’s supply chains.Recent events in the middle east have highlighted the need for flexible, agile supply chains that give us options when the flow of goods is interrupted or prices move beyond tolerable fluctuation points. It is important to plan contingencies and strike the right balance between local, regional and global dependencies and resources. DHL (one of our customers) in February was impacted like everyone else in region, but services were only interrupted for one day.