Recently, I attended the Supply Chain Insights Global Summit. I had been impressed with the content from some of the sessions from last year’s event so I was honored to attend this year’s event as a guest blogger. The summit was a small but quality gathering of supply chain practitioners, solution providers, consultants and academics. This year’s theme was a topic that I spend much of my time thinking about: “Imagine the Supply Chain of the Future.”
Thinking End-to-End
Lora Cecere kicked off the conference with a warning that we don’t get to supply chain excellence with tight integrated silos; instead, she noted we must and look at supply chains as complex systems and think end-to-end. She also argued that rather than starting with a process without any context, one must design supply chains to support business strategies. This was good to hear since our own direction here at JDA has been a methodic journey to integrate strategy, planning and execution end-to-end in order to drive superior business performance.
Later in the conference we had an excellent case study presentation from Dave Biegger, senior vice president of global supply chain, Campbell Soup Company. Campbell’s supply chain spans from agriculture and manufacturing to distribution and all the way to the customer. Dave laid out how Campbell reduced assets by 35 percent while maintaining the same capacity and actually increasing flexibility. They did this through an integrated end-to-end initiative coordinating operating strategy, network optimization, operational excellence, visibility and planning. A key element of their transformation was simplification through a move to common platforms and more late style differentiation.
Thinking Globally
In addition, it was great to hear from Dr. Laura D’Andrea Tyson, professor and director of the Institute for Business and Social Impact at the University of California at Berkeley (my alma mater) on navigating the ups and downs of the global economy and the role supply chain plans. Dr. Tyson gave a thoughtful roundup of global economic outlook. She also argued that while some would claim that globalization as measured in flow of goods is in retreat, if you look at cross border flows of data there is actually a 50 percent increase each year.
For those interested, there is an excellent slideshow by McKinsey Global Institute titled “The Expanding Network of Global Flows.” We must think differently about globalization and supply chains. Supply chains of the future will connect partners across the globe to create and deliver value in new and disruptive ways that were perhaps unimaginable in the past.
Thinking Differently
The most interesting and inspiring presentations from the conference were about disruptive business models and technologies. Tom Bonkenberg, partner, St. Onge Company, gave a rather broad overview of robotics technology and how it can impact supply chains. He challenged us to imagine trucks and warehouses that can run 24×7. As someone who has been watching technology trends I agree that we are on the cusp of explosive adoption of robotics and machine learning technologies. However, I believe that rather than moving to lights-out fully automated warehouses, we will see robots as enablers and helpers to humans where they will pick up an increasing portion of routine, strenuous or dangerous tasks. Tom mentioned that the one big advantage of recent technologies is that companies do not have to go “all in” on robotics where they must make significant investments, build and run the facility entirely designed for automated operations.
Phillipe Depallens, general manager, Ultimate Ears Pro, told a remarkable story of how Ultimate Ears Pro used 3D printing and Cloud to re-invent their supply chain delivering in-ear monitors fitted and personalized to each vocalist. Through this new digitized supply chain they not only reduced end-to-end cycle times but also radically improved the customer experience.
Presenters from Sonoco and Colgate Palmolive discussed how they each had re-invented their respective supply chains using outside in thinking, simplification and segmented strategies. Owens and Minor Healthcare Logistics deployed a new supply chain paradigm that works from the patient back covering 90 percent of hospital beds in the U.S. They used JDA Warehouse Management software as part of a broader solution to radically improve outcomes for everyone in the value chain.
Not to be outdone, Jeremiah Owyang rattled off examples after examples of companies and communities moving to a Collaborative Economy model. He talked about the shift in business models towards access over ownership, the rise of peer-to-peer marketplaces and the “maker” movement where customers co-create with product manufacturers. BMW has adopted the “brand as a service” model and now rents its 1-series electric cars in San Francisco. You unlock the car with an app and drive it once. In this new business model for a sharing economy, rather than selling one thousand cars once, BMW is selling time on the same car a thousand times. Peer-to-peer marketplaces such as game exchanges, lending clubs and apparel sharing on the one hand and the rise of sharing economy platforms such as Wonolo, Uber and Shapeways on the other are challenging traditional business models.
Supply Chain Saves the World
Attendees had a lot to think about. The supply chains of tomorrow will need new analytics that make sense of structured and unstructured data. We will need new talent and new skillsets to run these supply chains efficiently and profitably. We will also need a renewed sense of social and corporate responsibility. If Dr. Tyson is right, then the solution to addressing global economic challenges will also come from understanding and harnessing the power of the supply chains, thinking end-to-end, thinking globally and thinking different. I loved the conference bags made from natural fiber that read “Supply Chain Saves the World.”
Adeel Najmi, Chief Science Officer, JDA
