UNT Digitizing your Supply Chain Bernard Goor, One Network 1 (c) - - PowerPoint PPT Presentation

1 (c) One Network Enterprises. This document is proprietary and confidential and may not be disclosed without the prior written consent of One Network.

Bernard Goor, One Network

UNT Digitizing your Supply Chain

Bringing The Network to You

2 (c) One Network Enterprises. This document is proprietary and confidential and may not be disclosed without the prior written consent of One Network.

Business Dilemma

Innovation Costs

Digitize Your Supply Chain Digitize Your Consumer Experience Companies Consumers Channels Disruptors Market Conditions Companies are facing tough challenges … … which will force them to reduce cost and accelerate innovation – at the same time

AND

They will need to digitize both their front-end Consumer Experience and their back-end Supply Chain in order to win – or even survive

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What Does Digitization Mean?

• = The ability to share high fidelity information with all actors

in a process in order to

– Allow them to make optimized decisions based on real time recommendations, or – Automate the decisions on their behalf

• Key components

– Real time information flowing seamlessly across the process – Autonomous agents making recommendations or decisions

• Digitization means transparency, velocity, simplification and

automation

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Companies Can Digitize their Supply Chain by Deploying a Consumer-Driven Supply Network to …

• Demand Sensing
• Demand Forecasting
• Inventory Mgmt
• Replenishment Planning
• Suggested Ordering
• Demand Forecasting
• Order Mgmt
• Inventory Mgmt
• Replenishment Planning

Order Forecast Order Order Forecast Order Order Forecast Order

• Order Mgmt
• Inventory Mgmt
• MRP
• BOM Disaggregation

Inventory Optimization Production and Inventory Optimization Inventory Optimization Production and Inventory Optimization

Seamlessly propagate the demand signal back through the supply network Balance demand and supply at every node in the supply network in near real time Respond to demand signal in near real time to fulfill consumer demand at the lowest cost

Logistics Planning and Execution Logistics Planning and Execution Logistics Planning and Execution

• Order Mgmt
• Inventory Mgmt
• MRP

Gain end-to-end visibility across the entire network

Stores DCs Factories Suppliers

1 2 3 4

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Deploying a Consumer-Driven Supply Network Delivers Significant Benefits

Stores DCs Factories Suppliers

Increased service levels and fill rates Increased visibility and transparency across the entire network Improved logistics performance Optimized inventory levels at every node in the network Lower landed costs Increased sales Reduced spoilage, returns and markdowns Increased agility and velocity across the entire network

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Deloitte Agrees with the Value of Digital Supply Networks

• By connecting all the stages to one

another via advanced technologies, DSNs can minimize the latency, risk, and waste found in linear supply chains.

• Companies would be poised to

achieve new levels of performance, improve operational efficiency and effectiveness, and create new revenue opportunities.

Deloitte, “The rise of the digital supply network”, 2016

From traditional supply chains to digital supply networks (DSNs)

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KPMG Validates the Value Proposition for Demand- Driven Supply Chains

• Improved fill rates and reduced out-of-

stocks drive increased revenue and recoverable sales

• With greater certainty over demand,
• rganizations can carry less stock
• Better visibility of supply and demand

should lead to fewer disruptions to supplies

• Process automation reduces operating

expenses, allowing buyer/ planners to manage by exception Companies adopting demand-driven supply chains typically enjoy increased sales, reduced operating expenses and improved working capital

KPMG, “Demand-driven supply chain 2.0”, 2016

Sales Sales COGS COGS Planning Planning Transportation Transportation Actual Demand Actual Demand Promotional Demand Promotional Demand Buffer Buffer

1-4% Improvement in Sales 5-10 % Reduction in Operating Expense 20-30% Reduction in Inventory

Demand- Driven Traditional Model Traditional Model Demand- Driven Demand- Driven Traditional Model Sales Levels Expenses Levels Inventory Levels

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Revenue 1,000,000 $ 100% 1,000,000 $ Cost of Revenue 650,000 $ 65% 600,000 $ 60% (50,000) $

• 5%

Inventory 172,603 $ 63 136,986 $ 50 (35,616) $

• 13

Before After Difference

What Could the Financial Impact Be?

Example of a CG Food Manufacturing Company

• 5% reduction in COGS
• 20% reduction in Inventories
• $50 Million of COGS reduction
• $36 Million of inventory reduction

Average COGS% Average Days in Inventory

For a $1 Billion company

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Why is a Consumer-Driven Supply Network Better?

• Every company on the network uses its own systems

and data

• Companies on the network are connected via EDI,

spreadsheets and emails – maintained by each company

• Planning and execution are disconnected
• The companies on the network use common processes,

data and metrics (single version of the truth)

• All companies are connected to one single network –

maintained by One Network

• Planning and execution are integrated in real time via

machine learning agents

The Traditional Approach

Frictions Delays Inefficiencies High inventories High COGS Out of stocks

The Consumer-Driven Supply Network Approach

Network Platform

Network Platform

Agility Velocity Transparency Reduced inventories Lower COGS Improved on-shelf

availability

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Traditional Supply Chain Create a Bullwhip Effect

• The further back in the chain, the more variable the demand

signal becomes

Demand Variability DC Store Tier 2 MFG DC Tier1

Consumer

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Why is that Happening?

• Intercompany and cross-functional silos
• Disconnected planning and execution processes
• Redundant and repetitive processes across companies in the network

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Silos

• Inter-company silos
• Cross-functional silos

Sales Marketing Operations Supply Chain Finance Sales Marketing Operations Supply Chain Finance

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Disconnected Planning and Execution Processes

• Batch planning systems disconnected from continuous execution layer

Execution Planning Execution Planning Execution Planning Execution Planning Execution Planning

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Redundant and Repetitive Processes

• Sense and shape demand
• Synchronize supply and demand
• Respond to demand

Sense and Shape Demand Synchronize Supply and Demand Respond to Demand Sense and Shape Demand Synchronize Supply and Demand Respond to Demand Sense and Shape Demand Synchronize Supply and Demand Respond to Demand Sense and Shape Demand Synchronize Supply and Demand Respond to Demand Sense and Shape Demand Synchronize Supply and Demand Respond to Demand

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The Solution? Adopt a Consumer-Driven Supply Network

A Consumer-Driven Supply Network is a multi-party solution that connects your entire eco-system (you + your customers, distributors, suppliers and logistics providers) in a real-time decision-making, consumer-driven network

Consumer- Driven Supply Network

Logistics Providers Sellers Buyers Distributors

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A Consumer-Driven Supply Network Offers Unique Capabilities …

 Single version of the truth across the network  Intelligent closed loop planning and execution with machine learning agents providing

• ptimization within the

execution layer  System of engagement working together with your systems of record

Retailer Supplier Retailer Logistics Providers Consumer Goods Company Supplier Distributor

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… and Unique Benefits

 Higher forecast accuracy  Increased service levels and fill rates  Improved on-shelf availability  Increased revenues  Decreased inventory levels  Complete visibility and transparency across the network  Greater supply chain agility  Improved logistics performance

Retailer Supplier Retailer Logistics Providers Consumer Goods Company Supplier Distributor

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Example: One Network Solution Framework

Optimized Execution Integrated Business Planning Network Visibility and Monitoring Network Platform

By leveraging a many-to-many multi-party network platform that delivers security, scalability, reliability, extensibility and interoperability By enabling a distributed transaction orchestration backbone, promoting visibility and traceability of all supply chain events across the entire network, and enabling all parties to resolve issues in real time By optimizing planning and execution in real time within the execution layer, leveraging machine learning agents to continuously optimize supply chain events By providing a directional P&L to plan and monitor the financial impact of demand and supply execution, and take corrective actions to ensure financial success 1 2 3 4

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Network Enterprise

One Network Operates as a System of Engagement That Integrates all Companies to a Common Process

Distributors Suppliers

Step 6 Step 5 Step 4 Step 3 Step 2 Step 1 Step 8 Step 7

Carriers Carriers

Systems of Record System of Engagement

CG Company Retailers

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The One Network Platform Is Uniquely Built to Enable Multi-Party Processes

Common Data

• Single version
• f the truth of

master data and transaction data across all network nodes Permissibility

• Multi-party

permission model to maintain secure access by role for all network participants Modularity

• Applications

assembled from reusable modules built specifically for the industry Scalability

• Horizontally

scalable middle tier with grid computing architecture Reliability

• Highly

redundant and reliable architecture Interoperability

• Extensive

integration capabilities with enterprise systems to enable dual platform strategy Extensibility

• Rich SDK and

user interface to support highly flexible, configurable and extensible business processes

Network Platform

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Application Logic Application Logic

Built by Client, ONE, Partner….

INDUSTRY CORE MODULE

IXM Engines Application Models and Mixins Core Business Logic User Interface

PLATFORM

Computational Grid Agent Framework SDK and Studio Integration (REST, SOAP, etc) Command Center UI Framework Modeling Framework Master Data Models Common Transaction Models

CUSTOM CUSTOM APPLICATION MODULES

Multi Layer Development Model

CUSTOM

CUSTOM

PUBLIC API PUBLIC API PUBLIC API PUBLIC API

Platform extensions through DevNet

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Network Visibility and Monitoring

• Objectives:

– Maintain the traceability and safety of your products across the entire network; – Track all your orders and shipments on your extended network and react in real time to

any disruption;

– Improve your ability to collaborate effectively with your customers, distributors and

suppliers by leveraging a single version of the truth across the network

• Key features

– End-to-end monitoring, visibility and traceability of all supply chain events across the network – Early visibility to business disruptions through role-driven alerts – Real time issue resolution

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Optimized Execution

• Objectives:

– Improve your demand forecast and order forecast accuracy, and propagate the forecast

through the entire network to optimize the synchronization of demand and supply across all nodes in the network

– Increase service levels, while reducing landed costs and inventory levels – Increase the velocity and agility of your supply chain by eliminating all the silos, frictions

and inefficiencies impacting your B2B transactions

• Key features

– Complete multi-party synchronization across forecasts, orders and shipments – Optimization within the execution layer with AI agent technology – Real time propagation through the entire network

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Integrated Business Planning

• Objectives:

– Improve your ability to react in real time to any financial planning deviation that can be

resolved by increasing demand and/or improving supply across the entire network

– Leverage what-if scenario analysis to visualize the impact of demand and supply

initiatives on your P&L

– Map the impact of demand and supply on your strategic plans (e.g. commodity

plans, long term supply contracts)

• Key features

– Ability to synchronize financial planning with demand and supply planning – What-if analysis and strategic planning – Real time P&L visualization

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One Network Enables All Levels of Control Tower Deployments

Control Tower Level 1 Visibility Control Tower Level 2 Alerts Control Tower Level 3 Decision Support Control Tower Level 4 Autonomous

Visibility to all the events and milestones you want track across the entire network + Alerts tagged to all events and milestones + Exception-based management + Multi-party collaboration to resolve them in real time + Execution of transactions within the control tower, with the users making decisions based on recommendations from intelligent machine- learning agents + Decisions made autonomously by the intelligent machine- learning agents imbedded in the execution layer without human intervention

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Your Mission (if you Choose to Accept it)

• Study Consumer-Driven Supply Networks
• Understand why and how a Consumer-Driven Supply network will drive a

quantum leap performance improvement in Supply Chains and Logistics

Agility Velocity Transparency Reduced inventories Lower COGS Improved on-shelf

availability Network Platform

Network Platform

Frictions Delays Inefficiencies High inventories High COGS Out of stocks

27 (c) One Network Enterprises. This document is proprietary and confidential and may not be disclosed without the prior written consent of One Network.

References

• https://www.retailsupplychaininsights.com/doc/how-to-beat-amazon-by-

digitizing-your-supply-chain-0001

• http://www.inboundlogistics.com/cms/article/why-grocery-retailers-need-to-

embrace-supply-chain-digitization/

• http://www.mytotalretail.com/article/create-a-consumer-driven-supply-network/
• https://www.linkedin.com/feed/update/urn:li:activity:6305411834098835456
• https://www.linkedin.com/feed/update/urn:li:activity:6305891626443169792
• https://www.linkedin.com/feed/update/urn:li:activity:6308668647510548480

bgoor@onenetwork.com www.linkedin.com/in/bernardgoor-onenetwork @bernardgoor

28 (c) One Network Enterprises. This document is proprietary and confidential and may not be disclosed without the prior written consent of One Network.

Thank You!